Meta Platforms Inc.'s META fourth-quarter performance has impressed analysts, leading to "increased confidence" about the company's potential going forward.
What Happened: Wedbush's Dan Ives believes "comeback kid Mark Zuckerberg is just getting started," sounding a bullish note on artificial intelligence (AI) being the next growth driver for Meta.
"It's a turnaround for the ages," Ives remarked in an interaction with CNBC's Morgan Brennan. "I mean go back a year ago, and now you are doing dividends."
Meta reported $40.11 billion in fourth-quarter revenue, which is an increase of 25% year-on-year. The company also declared its first-ever quarterly dividend and also announced that it intends to "pay a cash dividend on a quarterly basis going forward."
Meta's "year of efficiency" also saw it get leaner, with its headcount down 22%, total expenses down 8%.
Meta is also focusing on competing with Apple Inc.’s (NASDAQ:) Vision Pro headset. Its research and development costs rose 8%, driven by its Reality Labs division that focuses on Oculus virtual reality technology.
Meta's stock registered a 20% rise on Thursday post the earnings announcement, while it has gained over 37% since the beginning of 2024.
The rally in Meta's shares also helped Zuckerberg re-enter the top five on the Bloomberg Billionaires Index.
For investors who have missed out on this rally, Deepwater Asset Management's Gene Munster believes there is still some juice left.
"It's not too late when it comes to Meta," Munster said in an interaction with CNBC.
He added that Deepwater considered paring its Meta holdings prior to the earnings print, but decided against it. "We decided to hold because our belief is so strong. We asked ourselves, if we truly believe what's going to happen in AI, we should be owners of Meta."
"From our math, we think that this earnings should grow about 50% over the next two years."
Why It Matters: Meanwhile, analyst ratings have poured in post the Zuckerberg-led company's earnings announcement. The sentiment remains positive across the board, with analysts upgrading their price targets for Meta to $500 to $525.
Goldman Sachs' Eric Sheridan believes that while there could be debates about a potential revenue deceleration over 2024, the fourth-quarter performance allows investors to put prior questions around platform strength behind us."
Meta also announced the second generation of its own AI chip as it seeks to reduce costs and reliance on Nvidia Corp. NVDA.
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