Meta’s stock is wrapping up a record year, spurred by cost cuts that followed a disastrous 2022
Meta founder and CEO Mark Zuckerberg speaks during the Meta Connect event at Meta headquarters in Menlo Park, California, on Sept. 27, 2023.
Josh Edelson | AFP | Getty Images
Last year at this time, Meta was navigating a crisis of confidence that had pushed its stock price to its lowest since 2016. Sales were dropping, TikTok was rising, and CEO Mark Zuckerberg’s bet-the-house wager on the metaverse was looking like a money pit.
Wall Street saw a very different story play out in 2023.
As of Friday’s close, Meta shares are up 178% for the year, on pace for their best year ever, topping the 105% jump in 2013, which was the year after Facebook’s IPO. The stock rose another 3% on Monday to $344.64, its highest in two years. It’s now just 10% below its record reached in September 2021, near the peak of the latest tech boom.
Among companies in the S&P 500, only chipmaker Nvidia had a better year, climbing 235% as of Friday.
Meta’s mega bounceback validates Zuckerberg’s declaration in early February that 2023 would be the company’s “year of efficiency” following the stock’s 64% plunge in 2022. Hefty cost cuts were at the top of his agenda, with Facebook’s parent company cutting more than 20,000 jobs and Zuckerberg acknowledging that economic challenges, stepped-up competition and advertising losses “caused our revenue to be much lower than I’d expected.”
After three straight quarters of declining sales last year, growth returned in 2023, and for the third quarter Meta recorded expansion of 23%, its sharpest increase in two years. The results were driven by a rebound in digital advertising and market share gains over rivals Alphabet and Snap.
The biggest catalyst, according to Longbow Asset Management CEO Jake Dollarhide, was Zuckerberg’s “change of attitude” and his willingness to listen to shareholder concerns instead of seemingly dismissing them in favor of his preferred mode of operation.
While Zuckerberg continues to invest heavily in the metaverse, which he sees as his company’s future, he’s refocused the business toward what actually matters today — advertising — and responded to investor concerns about out-of-control spending.
“It was the change in tone from Zuck,” Dollarhide said. “He went from thumbing his nose at shareholders” and talking about the billions he was spending on the metaverse “to listening and communicating in a different way,” Dollarhide added.
Plenty of challenges remain as the calendar turns to 2024.
Meta said in its latest earnings report that the digital ad market is still rocky, in part because advertisers are weighing the potential impact of the Israel-Hamas war. The company is also dealing with a number of new lawsuits that allege its products are harmful and addictive to children. And virtual reality continues to be a niche market, despite Meta’s hefty promotions of its new Quest 3 headsets.
“As long as the core business is humming along and is kind of improving, I think investors will probably continue to give them a pass,” said John Blackledge, an analyst at Cowen who recommends buying the stock.
Meta declined to provide a comment for this story.
Meta has now had well over two years to adapt to one of the most harmful changes to its business in the almost two decades since Zuckerberg started the company in his Harvard dorm room. In 2021, Apple updated its iPhone operating system in a way that gave users more control over how they could be targeted with ads. The update hit at the heart of Facebook’s ad business and resulted in the loss of billions of dollars of revenue.
As hard as Apple’s privacy changes hurt Facebook, they were equally devastating to other social media companies, most notably Snap. But Meta quickly got to work rebuilding its ad technology, with a major investment in artificial intelligence, and in the latest quarter reported much faster revenue growth than Google or Snap.
China has been a big part of the story. Susan Li, Meta’s finance chief, told analysts on the earnings call that online commerce and gaming “benefited from spend among advertisers in China reaching customers in other markets.” That means Chinese companies are spending heavily on Facebook and Instagram to send targeted advertising to the company’s billions of users around the world.
A Shein pop-up store inside a Forever 21 store in Times Square in New York on Nov. 10, 2023.
Yuki Iwamura | Bloomberg | Getty Images
JMP analysts estimate that e-commerce companies Temu and Shein, which both have roots in China, spent about $600 million and $200 million, respectively, on ads with Meta in the third quarter, leading to year-over-year growth of 44% from Asian advertisers.
In addition to Apple’s changes, Meta was also hurt in 2022 by the rapid rise of TikTok, which pioneered the short-video market, and a rotation out of tech stocks due to rising interest rates and surging inflation. All the while, Zuckerberg’s big bet on the metaverse continued to pile up billions of dollars in losses, underscoring the challenges of making virtual reality and augmented reality technologies appealing to mainstream consumers.
Altimeter Capital Chair and CEO Brad Gerstner wrote an open letter to Meta and Zuckerberg in October 2022 urging the company to “get fit and focused” by cutting staff and reducing metaverse investments.
Tom Champion, an analyst at Piper Sandler, told CNBC that Meta had to adjust to a rapidly changing reality. During Covid, digital media and e-commerce took off and, because the economy remained strong at the time, consumers and businesses had plenty of money to spend.
“We all extrapolated the growth trends around digital advertising that emerged during the pandemic, and Meta management invested behind that extrapolation of the trend as well,” said Champion, who has a buy rating on the stock. “The revenue picture changed a hell of a lot faster than cost.”
A few weeks after the Altimeter letter, Zuckerberg announced the first of what would be three rounds of layoffs affecting about 25% of the company’s workforce. Zuckerberg admitted to miscalculating what would happen when the economy reopened from the pandemic.
Reasons for skepticism
Meta’s initial round of layoffs in 2022 helped kickstart the stock’s rebound.
Then in February, Meta revealed that its total expenses for 2023 would be in the range of $89 billion to $95 billion, which was lower than its prior 2023 outlook of $94 billion to $100 billion.
The shares shot up 76% in the first quarter.
Ultimately, it appears as if expenses will be even lower than that revised number. Meta said in October that total costs for the year will be between $87 billion and $89 billion.
But, as Blackledge notes, Zuckerberg has so far largely spared the Reality Labs unit, which houses the company’s work in metaverse hardware and software. Meta said in its third-quarter report that operating losses in Reality Labs will “increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and our investments to further scale our ecosystem.”
The division lost $3.7 billion in the period and over $11 billion in the first nine months of the year.
Zuckerberg has spent much of the year touting Meta’s investments in AI, which has helped bolster its ad technology. Included in that conversation is the work Meta has done in building its large language model called Llama, which has gained popularity since OpenAI’s ChatGPT chatbot introduced the concept of generative AI to the mainstream.
“It’s a little tough for me to draw a line between a technology like Llama and the core business, but I think there are enough announcements and discussion and commentary from management to suggest that they are harnessing this technology in a lot of different ways,” Champion said.
Champion added that AI has helped Meta more efficiently operate its data centers, and he’s optimistic about the company’s use of AI to create more compelling digital assistants that could be useful for business messaging.
Despite Meta’s strong performance in 2023, Needham’s Laura Martin remains skeptical.
Martin has a sell rating on the stock, making her one of only two analysts tracked by FactSet without a buy or hold recommendation. She says 2024 will be a “cautionary tale” for the company because it still faces some major existential issues.
Meta doesn’t control a platform like Apple’s iOS or Google’s Android, which means it remains at risk of significant policy changes at those companies. While Meta eventually managed to weather Apple’s iOS privacy update through its AI investments, it now has to deal with Google’s upcoming plans to phase out third-party cookies in 2024, which will likely have a similarly weakening effect on its online ad business, Martin said.
“Cookie deprecation on Android is a big deal,” she said.
On top of that, Martin sees smart TVs as the area where advertisers are looking to divert spending as the major streaming platforms continue to pick up users who are abandoning linear television. That’s not Meta’s market.
Then there’s the influencer problem. Popular content creators are focusing their efforts on TikTok and YouTube, catering to younger audiences. A recent Pew Research Center study found that nearly 1 in 5 young adults say they use those video-streaming apps “almost constantly.”
TikTok, which is owned by China’s ByteDance, faces the risk of being shut down by U.S. lawmakers who have tried to make the case that it’s a national security concern. But that issue has been sidelined for months and in November a federal judge in Montana blocked a law that would have resulted in a statewide ban of TikTok starting in January.
Analysts aren’t expecting TikTok to go anywhere, meaning it will continue to pose a challenge to Meta.
“The regulators can’t get stuff done,” Martin said.
Piper Sandler’s Champion said he “personally can’t imagine in America where something like TikTok gets banned.” But he added, “Who knows — anything can happen.”
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Technology
Bitcoin sinks to $115,000 after hitting its newest record, as macro concerns spark liquidation wave
A worsening macroeconomic climate and the collapse of industry giants such as FTX and Terra have weighed on bitcoin’s price this year.
STR | Nurphoto via Getty Images
The crypto market tumbled to begin the week as heightened macro concerns triggered more than $500 million in forced selling of long positions.
The price of bitcoin was last lower by 2% at $115,255.70, after touching a new all-time high last week – its fourth one this year – at $124,496. At one point, it fell as low as $114,706. Ether slid 4% to $4,283.15 after coming within spitting distance of its roughly $4,800 record last week. Both coins rolled over after higher-than-expected July wholesale inflation data raised questions over a Federal Reserve rate cut in September.
Investors’ profit-taking triggered a wave of liquidations across the crypto market.
In the past 24 hours, sales from 131,455 traders totaled $552.58 million, according to Coin Metrics. That figure includes about $123 million in long bitcoin liquidations and $178 million in long ether liquidations. This happens when traders are forced to sell their assets at market price to settle their debts, pushing prices lower.
Bitcoin briefly dropped below $115,000 after reaching nearly $125,000 last week
Adding to investor disappointment were comments from Treasury Secretary Scott Bessent, who clarified Thursday that the strategic bitcoin reserve President Donald Trump established back in March will be confined to bitcoin forfeited to the federal government, as it explores “budget-neutral pathways to acquire more bitcoin.”
The top cryptocurrencies by market cap fell with the blue-chip coins, with the CoinDesk 20 index, a measure of the broader crypto market, down 3.7%. Crypto related stocks were under pressure premarket, led by ether treasury stocks. Bitmine Immersion was down 6% and SharpLink Gaming fell 3%. Crypto exchange Bullish, which made its public trading debut last week, was also lower by 3%.
This week, investors are keeping an eye on the Fed’s annual economic symposium in Jackson Hole, Wyoming for clues around what could happen at the central bank’s remaining policy meetings this year. Crypto traders also will be watching Thursday’s jobless claims data.
Last week’s test of bitcoin and ether highs surprised traders who expected an August pullback for cryptocurrencies, expecting macro concerns to steal focus from recent momentum around crypto’s institutional and corporate adoption – especially in what has historically proven a weak trading month for many markets – until the September Fed meeting.
Many see pullbacks this month as healthy and strategic cooldowns rather than reactions to crisis, thanks largely to support from crypto ETFs as well as companies focused on aggressively accumulating bitcoin and ether. Although ETFs tracking the price of bitcoin and ether posted net outflows on Friday, they logged net inflows of $547 million and $2.9 billion, respectively, for the week. For ETH funds it was a record week of inflows as well as their 14th consecutive week of inflows.
OpenAI Co-Founder and CEO Sam Altman speaks at Snowflake Summit in San Francisco on June 2, 2025.
Justin Sullivan | Getty Images News | Getty Images
OpenAI CEO Sam Altman thinks the artificial intelligence market is in a bubble, according to a report from The Verge published Friday.
“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman told a small group of reporters last week.
“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” he was quoted as saying.
Altman appeared to compare this dynamic to the infamous dot-com bubble, a stock market crash centered on internet-based companies that led to massive investor enthusiasm during the late 1990s. Between March 2000 and October 2002, the Nasdaq lost nearly 80% of its value after many of these companies failed to generate revenue or profits.
His comments add to growing concern among experts and analysts that investment in AI is moving too fast. Alibaba co-founder Joe Tsai, Bridgewater Associates’ Ray Dalio and Apollo Global Management chief economist Torsten Slok have all raised similar warnings.
Last month, Slok stated in a report that he believed the AI bubble of today was, in fact, bigger than the internet bubble, with the top 10 companies in the S&P 500 more overvalued than they were in the 1990s.
In an email to CNBC on Monday, Ray Wang, CEO of Silicon Valley-based Constellation Research, told CNBC that he thought Altman’s comments carry some validity, but that the risks are company-dependent.
“From the perspective of broader investment in AI and semiconductors… I don’t see it as a bubble. The fundamentals across the supply chain remain strong, and the long-term trajectory of the AI trend supports continued investment,” he said.
However, he added that there is an increasing amount of speculative capital chasing companies with weaker fundamentals and only perceived potential, which could create pockets of overvaluation.
Many Fears of an AI bubble had hit a fever pitch at the start of this year when Chinese start-up DeepSeek released a competitive reasoning model. The company claimed one version of its advanced large language models had been trained for under $6 million, a fraction of the billions being spent by U.S. AI market leaders like OpenAI, though these claims were also been met with some skepticism.
Earlier this month, Altman told CNBC that OpenAI’s annual recurring revenue is on track to pass $20 billion this year, but that despite that, it remains unprofitable.
The release of OpenAI’s latest GPT-5 AI model earlier this month had also been rocky, with some critics complaining that it had a less intuitive feel. This resulted in the company restoring access to legacy GPT-4 models for paying customers.
Following the release of the model, Altman has also signaled more caution about some of the AI industry’s more bullish predictions.
Speaking to CNBC, he said that he thought the term artificial general intelligence, or “AGI,” is losing relevance, when asked whether the GPT-5 model moves the world any closer to achieving AGI.
AGI refers to the concept of a form of artificial intelligence that can perform any intellectual task that a human can — something that OpenAI has been working towards for years and that Altman previously said could be achieved in the “reasonably close-ish future.“
Regardless, faith in OpenAI from investors has remained strong this year. CNBC confirmed Friday that the company was preparing to sell around $6 billion in stock as part of a secondary sale that would value it at roughly $500 billion.
In March, it had announced a $40 billion funding round at a $300 billion valuation, by far the largest amount ever raised by a private tech company.
In The Verge article on Friday, the OpenAI CEO also discussed OpenAI’s expansion into consumer hardware, brain-computer interfaces and social media.
Altman also said that he expects OpenAI to spend trillions of dollars on its data center buildout in the “not very distant future,” and signaled that the company would be interested in buying Chrome if the U.S. government were to force Google to sell it.
Asked if he would be CEO of OpenAI in a few years, he was quoted as saying, “I mean, maybe an AI is in three years. That’s a long time.”
Nvidia CEO Jensen Huang, right, speaks alongside President Donald Trump about investing in America, at the White House in Washington, on April 30, 2025.
Jim Watson | AFP | Getty Images
Six Senate Democrats on Friday released an open letter asking President Donald Trump to reconsider his decision to allow tech giants Nvidia and Advanced Micro Devices to sell AI semiconductor chips to China in exchange for 15% of revenue from the sales.
The letter — signed by Senators Chuck Schumer, D-N.Y.; Mark Warner, D-Va.; Jack Reed, D-R.I.; Jeanne Shaheen, D-N.H.; Christopher Coons, D-Del.; and Elizabeth Warren, D-Mass. — was in response to an Aug. 11 announcement by Trump that Nvidia and AMD would pay the U.S. government a 15% cut of revenue from chip sales to China in exchange for export licenses.
“Our national security and military readiness relies upon American innovators inventing and producing the best technology in the world, and in maintaining that qualitative advantage in sensitive domains. The United States has historically been successful in maintaining and building that advantage because of, in part, our ability to deny adversaries access to those technologies,” the letter states.
“The willingness displayed in this arrangement to ‘negotiate’ away America’s competitive edge that is key to our national security in exchange for what is, in effect, a commission on a sale of AI-enabling technology to our main global competitor, is cause for serious alarm,” the letter continues.
Senators also warned that selling advanced AI chips — specifically Nvidia’s H20 and AMD’s MI308 chips — to China could help strengthen its military systems, a claim that Nvidia denies.
In a statement to CNBC, a Nvidia spokesperson said: “The H20 would not enhance anyone’s military capabilities, but would have helped America attract the support of developers worldwide and win the AI race. Banning the H20 cost American taxpayers billions of dollars, without any benefit.”
The letter from Senate Democrats also requests a detailed response from the administration by Friday, Aug. 22, regarding the current deal involving Nvidia and AMD, as well as any similar arrangements being made with other companies.
“We again urge your administration to quickly reverse course and abandon this reckless plan to trade away U.S. technology leadership,” the letter states.
A request for comment from the White House and AMD was not immediately returned.
Despite Trump allowing chip sales to resume, it has already become clear that China isn’t welcoming Nvidia back with open arms, instead urging tech companies to avoid buying U.S. companies’ chips, according to a Bloomberg report.
“We’re hearing that this is a hard mandate, and that [authorities are actually] stopping additional orders of H20s for some companies,” Qingyuan Lin, a senior analyst covering China semiconductors at Bernstein, told CNBC.
In a separate report, The Information said regulators in China have ordered major tech companies, including ByteDance, Alibaba, and Tencent, to suspend Nvidia chip purchases until a national security review is complete.
— CNBC’s Kristina Partsinevelos contributed to this report
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