TECH Meta’s stock is wrapping up a record year, spurred by cost cuts that followed a disastrous 2022

Last year at this time, Meta
was navigating a crisis of confidence that had pushed its stock price to its lowest since 2016. Sales were dropping, TikTok was rising, and CEO Mark Zuckerberg’s bet-the-house wager on the metaverse was looking like a money pit.

Wall Street saw a very different story play out in 2023.

As of Friday’s close, Meta shares are up 178% for the year, on pace for their best year ever, topping the 105% jump in 2013, which was the year after Facebook’s IPO. The stock rose another 2.9% on Monday to $344.62, its highest in almost two years. It’s now just 10% below its record reached in September 2021, near the peak of the latest tech boom.

Among companies in the S&P 500, only chipmaker Nvidia
had a better year, climbing 235% as of Friday.

Meta’s mega bounceback validates Zuckerberg’s declaration in early February that 2023 would be the company’s “year of efficiency” following the stock’s 64% plunge in 2022. Hefty cost cuts were at the top of his agenda, with Facebook’s parent company cutting more than 20,000 jobs and Zuckerberg acknowledging that economic challenges, stepped-up competition and advertising losses “caused our revenue to be much lower than I’d expected.”

After three straight quarters of declining sales last year, growth returned in 2023, and for the third quarter Meta recorded expansion of 23%, its sharpest increase in two years. The results were driven by a rebound in digital advertising and market share gains over rivals Alphabet
and Snap
.

The biggest catalyst, according to Longbow Asset Management CEO Jake Dollarhide, was Zuckerberg’s “change of attitude” and his willingness to listen to shareholder concerns instead of seemingly dismissing them in favor of his preferred mode of operation.

While Zuckerberg continues to invest heavily in the metaverse, which he sees as his company’s future, he’s refocused the business toward what actually matters today — advertising — and responded to investor concerns about out-of-control spending.

“It was the change in tone from Zuck,” Dollarhide said. “He went from thumbing his nose at shareholders” and talking about the billions he was spending on the metaverse “to listening and communicating in a different way,” Dollarhide added.