Meta Q3 - Big U-turn

Last week, Meta released some really good-looking numbers but the share price fell, along with the rest of the tech sector. Thankfully, Friday and Monday have both been strong up days, and it's trading above $300 again.

Total monthly users over their social media sites (WhatsApp, Facebook, Instagram and Messenger) are just shy of 4 billion people. That's astonishing, half the population of the whole world.

Ad impressions grew by 31%, revenues were higher by 23% and EBIT margins soared to 40.3% from 29.4% in the previous quarter. Naturally this all gave a big boost to earnings which came in at $4.49 per share, compared to $1.64 this time last year.

This company has done a big u-turn on previous plans to spend big on the metaverse. Fortunately, a lot of that spending involved buying Nvidia chips and building data centres which are also incredibly useful for things like AI.

I must say, I am very impressed with Mark Zuckerberg and his team who have aced what they called the year of efficiency. A lot changed in 2022 when interest rates sky rocketed and it is not always easy for a company the size of Meta to be able to pivot so quickly. The share price reflects this achievement and is up 3 fold since the lows of October last year.

Meta has some very exciting projects in open-source AI which allows them to manage and understand consumer behaviour. They have an incredibly large set of users, a well-established and profitable advertising business and are even looking at a subscription model for users who want to avoid adverts.

This is another wonderful business that should have a decent-sized allocation in your portfolio.