SHARES OF FACEBOOK PARENT META SOAR DESPITE GROWTH SLOWDOWN

Facebook parent Meta’s first-quarter profit and its count of daily users jumped past Wall Street’s expectations despite the company’s slowest revenue growth since going public a decade ago. Shares were up sharply in after-hours trading.

Meta cut a sharp contrast with Google parent Alphabet, which this week reported what analysts called disappointing earnings, with profit below Wall Street’s expectations. Google also reported a revenue growth slowdown, but for Meta this appeared to have been mitigated by an increase in daily active users that “was enough to send the shorts covering and the stock surging,” said Jesse Cohen, senior analyst at Investing.com.

“That being said, it was a mixed report overall as the social media giant continues to struggle with slowing revenue growth amid reduced ad spending amid the current inflationary environment,” Cohen said.

Apple’s recent privacy changes to its iPhone software iOS have made it harder for companies like Meta to track people for advertising purposes, which also puts pressure on the company’s revenue. For months now, Meta has been warning investors that its revenue can’t continue to grow at the breakneck pace they are accustomed to, so it’s likely that the quarter’s single-digit revenue growth was already baked into investor expectations.