NASDAQ: META shares experienced a rise today following a favorable inflation report, news of staff layoffs, and potential gains from a TikTok ban.
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As of 3 p.m. ET Wednesday, Meta’s stock was up 4.5%.
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Positive Economic News Boosts Meta
Stocks rose today following a report from the Bureau of Labor Statistics. The core Consumer Price Index (CPI) increased by 3.2% in December, slightly below the expected 3.3% increase.
Although Meta is not directly affected by interest rates, its revenue heavily relies on advertising, making it sensitive to the wider economy. Lower interest rates typically encourage more business spending, which can benefit Meta.
In addition, reports revealed the company plans to lay off 5% of its employees, letting go of lower-performing staff. A similar announcement in late 2022 led to a jump in Meta’s stock price, and investors are hopeful that these layoffs will also lead to higher profits.
Moreover, TikTok faces a potential ban in the U.S. this Sunday, unless it complies with regulations or a legal injunction intervenes. Should the ban occur, users might shift to Meta’s platforms. Instagram and Facebook are already competing with TikTok, particularly since the rollout of Reels, a short-form video feature.
Future Outlook for Meta Stock
In an internal communication regarding the layoffs, CEO Mark Zuckerberg indicated that 2025 will be “an intense year,” suggesting possible new or enhanced products. This prospect may bode well for the stock’s future.
Meta’s stock is likely to continue climbing alongside positive economic indicators, and a TikTok ban could be particularly beneficial.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
