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Meta benefits from a rising tide
Stocks rose broadly today in response to the latest news release from the Bureau of Labor Statistics. The core Consumer Price Index (CPI) increased by 3.2% in December, slightly below the 3.3% economists had predicted.
While Meta is not directly impacted by interest rates, as it earns revenue from advertising, its performance is linked to the overall health of the economy. Lower interest rates usually spur business spending.
Reports emerged yesterday that Meta intends to reduce its workforce by 5%, targeting its lowest performers. The company’s stock surged following a similar announcement at the end of 2022, with investors anticipating a boost in profits from the impending layoffs.
Furthermore, TikTok faces a potential ban in the U.S. starting this Sunday if it fails to comply with regulations or if the Supreme Court does not intervene. In the event of a ban, users may shift to Meta’s platforms. Meta’s Instagram and Facebook are already in direct competition with TikTok, especially after the introduction of Reels, a short-form video feature, a few years back.
Future outlook for Meta stock
According to reports, Mark Zuckerberg mentioned in an internal communication about the layoffs that 2025 will be a critical year, hinting at potential new products or a significant expansion of existing offerings, which could bode well for the company’s stock performance.
Expect Meta’s stock to continue its upward trajectory on positive economic indicators, with a potential TikTok ban representing a positive outcome for the company’s shares.
Is investing $1,000 in Meta Platforms a wise decision?
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Randi Zuckerberg, a former Facebook market development director and spokesperson and the sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jeremy Bowman holds positions in Meta Platforms. The Motley Fool holds positions in and recommends Meta Platforms. The Motley Fool adheres to a strict disclosure policy.
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