Meta Shines As Only ‘Magnificent 7’ Stock To Hit Record High After Fed’s Historic Rate Cut, Retail Cheers On

Shares of Meta Platforms, Inc. (META) surged over 3% on Thursday, reaching a record high of $561.36 following the Federal Reserve’s unexpected 50 basis point rate cut.

Other “Magnificent 7” tech giants, including Alphabet, Tesla, Microsoft, Nvidia, Amazon, and Apple, were also in the green.

Thursday’s rally marks Meta’s fourth consecutive day of gains, and positions the company for its first record close since mid-July.

Meta’s rise comes despite ongoing scrutiny. The Federal Trade Commission on Thursday released a report accusing social media companies, including Meta, of extensive consumer surveillance and failing to safeguard children’s privacy.

Additionally, Meta faces an EU fine over its competitive practices in the classified ads market.

However, investor enthusiasm is largely focused on CEO Mark Zuckerberg’s strategic shift from augmented reality to artificial intelligence.

Meta’s recent investments in AI have already begun to pay off.

The company’s latest earnings report revealed that AI tools have enhanced content personalization on Instagram and Reels, driving a 6% increase in daily active users — the most in the last eight quarters. 
Video watch time, including for Reels, surged 25%, with Reels alone projected to generate $10 billion in revenue for 2024.

Zuckerberg had noted that AI helped increase time spent on Instagram by 24%, further improving ad performance.

Year-to-date, Meta’s shares have outperformed its tech peers, rising about 60%, as investors have reportedly grown increasingly skeptical about how quickly AI will benefit cloud giants like Microsoft and Google.

In contrast, Meta has demonstrated concrete results, showcasing how AI has directly enhanced its core ad business.

The upbeat sentiment around Meta was also reflected on Stocktwits, where followers turned from ‘neutral’ to ‘bullish’ (56/100), driven higher by hopes that the Federal Reserve’s rate cut would further benefit Meta’s AI-driven revenue streams.

With the central bank’s rate cut driving stock market gains across the board, the “Magnificent 7” tech giants reportedly added up to $400 billion in market capitalization on Thursday.

Read next: Apple Stock Poised For 3rd Day Of Gains, But Fresh EU Scrutiny And Retail Concerns Loom

Share

·

Add us on