According to reports, various social media services under the US technology giant Meta (formerly known as “Facebook”) have been shown to contain so-called “toxic content” that endangers the health of society or young people. However, this phenomenon does not affect investors’ The appetite of Meta stocks. Not long ago, Meta encountered a report by former employee whistleblower Hogan, which triggered a storm of negative public opinion and a wave of stock selling.
A few days ago, Meta stock finally ushered in its first weekly rise since the beginning of September. Last week, this stock rose by 5.4%, which is also the highest weekly gain in three months. Currently, Meta has recovered half of the stock price decline in October.
At present, many American investors admit that there are problems with the services provided by the Meta platform and the mobile chat tool Instagram. In addition, the various regulatory investigations facing the company will not end soon. Nevertheless, investors are affected by Meta’s business model and huge profits. Fascinated.
Kim Forrest, the chief investment officer of Rokeh Capital of the United States, told the media that consumers were aware of various facts about Meta. At that time, they were still using the service, and advertisers were willing to continue to pay. “This company It’s printing banknotes.”
During the global COVID-19 pandemic, even though some of Meta’s corporate clients have reduced their online advertising budgets, the company still expects to earn a net profit of US$40 billion this year, an increase of 37% over last year.
The current price of Meta stock is 23 times the expected profit. Among the top five technology companies in the United States based on capital market value, the company has the cheapest price-to-earnings ratio.
According to a report released by Wanda Research on Wednesday, US retail investors also promoted the rise of Meta’s share price. The company is one of the five stocks with the largest retail trading volume in the United States.
However, the company still faces some challenges. This quarter’s revenue expectations did not meet the expectations of Wall Street analysts. Meta explained last month that Apple’s revision of its privacy policy makes it more difficult for Internet companies to monitor user privacy, which will affect Meta advertising.
In addition, regulatory agencies in the United States and Europe continue to investigate Meta. Last Thursday, the British Secretary of Culture Nadine Dorries (Nadine Dorries) issued a stern warning that due to the failure to rectify harmful content on social platforms, Meta and its executives have been within a short period of time from criminal charges. Earlier, the “U.S. Economic Freedom Program” also called on regulators to investigate.
Former Google CEO Enrique Schmidt also said that in the internal documents leaked by the whistleblower, some of the company’s actions and facts are very worrying, and Meta is very clear about what he is doing.
But so far, Wall Street still supports Meta and the company’s strategy of developing new revenue (for example, starting to focus on immersive digital experiences such as Meta Universe). Among the 62 Wall Street analysts who follow Meta followed by a financial media in the United States, 80% of the analysts have a buy rating on the stock, and only three recommend a sell.
Currently, Meta is investing billions of dollars in its “reality laboratory” business, which includes the Oculus virtual reality headset business. One of Meta’s ambitions is to act as an operating system for the future augmented reality and virtual reality markets.
Andrew Boone, an analyst at JMP Securities in the United States, said that Reality Lab’s investment is a positive boost for the Meta advertising business. It is important to know that the company relied on industry-leading consumer privacy data to attract a large number of advertisers in the past.
Buner said that in the field of operating systems, there have been two trillion-dollar technology giants (ie Google and Apple), and they have each received generous returns. Therefore, for Meta, although the (meta universe) operating system has Not a small cost, it was totally worth it at the time.
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