The Facts
On Wednesday, Meta, the parent company of both Facebook and Instagram, reported first-quarter revenues of $28.6B and profits of $5.7B, surpassing market expectations after heavy job cuts.
The profits of $2.20 per share, although down from $2.72 per share in Q1 of 2022, exceeded expectations of $2.02, as had been predicted in polling by FactSet. In reaction to the news, Meta shares rose nearly 12% to $234.20 in after-hours trading on Wednesday.
The Spin
Narrative A
Meta follows the line of companies blowing expectations of profit margins for Big Tech in 2023. While the US economy continues to slow down, such results have made investors hopeful that any further increases in interest rates will not be a nail in the coffin, and potentially the economy may be stronger than it currently looks.
Narrative B
While Meta's profits and revenue are encouraging, caution should be exercised. Growth is growth, but the Q1 results are not by any stretch unfathomably impressive. It's unclear whether the company can return to its consistent double-digit growth of previous years, even if Q2 predictions expect further success for the tech giant.
