Meta announces layoffs and strategic shift amid market challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Aug 06 2024
0mins
Should l Buy META?
Source: Coinmarketcap
Meta Platforms Inc. is experiencing a pre-market decline of 3.00%, hitting a 20-day low, as the company announces significant layoffs and a strategic shift in focus.
The company plans to cut about 10% of its workforce, impacting over 1,000 jobs in virtual reality, as it reallocates resources towards artificial intelligence and mobile game development. This shift comes amid ongoing challenges in the VR space, where Meta's Reality Labs has reported over $70 billion in cumulative losses since 2020. The announcement reflects a broader trend in the market, where tech companies are adjusting their strategies in response to financial pressures and changing consumer preferences.
This strategic pivot may position Meta for future growth in the AI sector, but the immediate impact of layoffs and the company's ongoing financial struggles could weigh heavily on investor sentiment.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for META is 824.71 USD with a low forecast of 655.15 USD and a high forecast of 1117 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 670.210
Low
655.15
Averages
824.71
High
1117
Current: 670.210
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Generative AI Potential: Meta is planning to leverage generative AI to attract more advertisers, combining personalized content and shopping agent features, which is expected to generate substantial ad revenue and further solidify its market position.
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- Strong Financial Performance: Alphabet's revenue is projected to exceed $400 billion in 2025, reflecting a 15% year-over-year increase, while net income is expected to rise by 32% to $132.1 billion, showcasing its profitability and leadership in the AI sector.
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