When Meta Platforms (META) and Alphabet (GOOG) posted quarterly results, META stock rose by around 25% but GOOG stock gave up some gains. What did investors like about the social networking firm in a mature business phase?
Meta said that it would authorize a $40 billion buyback. The company ended the quarter with $40.74 billion against $9.92 billion in long-term debt. Free cash grew to just $5.28 billion, down from $12.6 billion last year.
Meta boosted investor confidence by maximizing shareholder value. It continues to invest heavily in its Metaverse platform. In Q4, it spent $9.22 billion in capital expenditure.
Investors are content that user engagement is still growing at a single-digit percentage rate. It is investing in artificial intelligence. It framed 2023 as a year of efficiency. By controlling costs, Meta may sustain profit margins.
Investors had less confidence in Alphabet. ChatGPT has become a buzzword this year, showcasing the power of AI. Google search, whose advertising rose to $59.04 billion versus $54.48 billion in Q3, is not spectacular. They are fine. The company avoided a revenue decline by growing by 1% Y/Y.
Expect Google to manage the slowdown in the cloud and advertising market during the upcoming recession.
