Shares of Meta Platforms (META 3.85%) rose today as the social media giant benefited from a cooler-than-expected inflation report, the company's announcement yesterday that it would lay off 5% of its staff, and the approaching TikTok ban, which could give a boost to Facebook and Instagram, the company's top two properties.
The stock was up 4.5% as of 3 p.m. ET Wednesday.
Image source: Getty Images.
Meta benefits from a rising tide
Stocks were up broadly today in reaction to the latest news release from the Bureau of Labor Statistics. The core Consumer Price Index (CPI) rose by 3.2% in December, slightly lower than the 3.3% economists had forecast.
While Meta isn't directly affected by interest rates, it makes its money from advertising, meaning it's sensitive to the health of the economy and lower interest rates tend to encourage business spending.
Meanwhile, yesterday, media outlets reported that the company is planning to cut 5% of its workforce, letting go of those deemed its lowest performers. Meta stock jumped after it announced a large workforce reduction at the end of 2022, and investors seem to hope that this next round of layoffs will give a bump to profits as well.
Additionally, TikTok is set to be banned in the U.S. on Sunday, if it's not sold in a way that meets rules or the Supreme Court doesn't intervene. If a ban happens, users could move over to Meta's platforms. Instagram and Facebook are already competing directly with TikTok after Meta launched Reels, its short-form video product, years ago.
What's next for Meta stock
In the internal post disclosing the layoffs, Zuckerberg reportedly said that 2025 will be "an intense year," alluding to possible new products or an aggressive ramp up of existing products, which could be good news for the stock.
Expect Meta stock to continue to move higher on positive economic news, and a TikTok ban would be a clear win for the stock.
