Meta Platforms Inc., the parent company of Facebook, Instagram, and Threads, extended its remarkable rally on Friday, rising 2.4% to close at a record high.
This latest surge came after a federal appeals court upheld a U.S. law mandating that TikTok’s Chinese parent company, ByteDance, sell the app or face an effective ban.
Meta’s stock has now climbed 77% in 2024, following an extraordinary 2023 where it nearly tripled in value. The rally has pushed the company’s market capitalization to nearly $1.6 trillion.
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Meta wasn’t the only tech giant reaching new peaks. Amazon also closed at an all-time high on Friday, bringing its gains for the year to 49%. The strong performance of tech megacap companies helped propel the Nasdaq Composite Index to a record close. The index rose 0.8% on Friday, extending its year-to-date gains to 32%.
Meanwhile, Apple, another tech heavyweight, saw a slight dip from its record high earlier in the week.
Zuckerberg Courts Trump Administration
Meta’s rising fortunes coincide with CEO Mark Zuckerberg’s apparent efforts to engage with the incoming Trump administration. Zuckerberg joined President-elect Donald Trump for a dinner at the Mar-a-Lago resort in Florida last week, where he reportedly demonstrated Meta’s Ray-Ban smart glasses. The meeting, first reported by Fox News, comes after years of sharp criticism from Trump, raising speculation that Zuckerberg is seeking a cooperative role in the new administration.
TikTok, one of Meta’s most formidable rivals, is at the heart of a geopolitical and legal battle that could reshape the U.S. social media industry. The app, popular with younger audiences and boasting around 170 million U.S. users, has faced mounting scrutiny over its ties to the Chinese government.
The U.S. Court of Appeals in Washington, D.C., delivered a unanimous ruling on Friday rejecting TikTok’s claims that the divestment law violates the First Amendment and other constitutional protections.
“The U.S. government provided persuasive evidence demonstrating that the Act protects national security in a manner consistent with the Constitution,” the court wrote.
In response, TikTok announced plans to appeal to the Supreme Court.
“The Supreme Court has an established historical record of protecting Americans’ right to free speech, and we expect they will do just that on this important constitutional issue,” a TikTok spokesperson said.
If TikTok fails to comply with the law by January 2025, companies like Apple, Google, and internet hosting providers will be required to sever ties with the app, effectively banning its operation in the U.S.
Meta’s Revival: The “Year of Efficiency”
But Meta’s current rally began in late 2022 and accelerated in 2023 after Zuckerberg declared it the company’s “year of efficiency.” This strategic shift saw Meta cut approximately 21,000 jobs and revamp its advertising systems using advancements in artificial intelligence (AI).
In its most recent earnings report, Meta posted a 19% year-over-year revenue increase, though it cautioned investors about significant infrastructure spending planned for 2025. The company reported 3.29 billion “daily active people” across its platforms in the third quarter, a modest 5% increase from the previous year.
Meta has heavily invested in AI development, including building data centers and acquiring high-performance Nvidia graphics processing units. On Threads, Zuckerberg announced that Meta AI now has nearly 600 million monthly active users and teased the upcoming release of Llama 3.3, the latest version of its open-source large language model.
However, Zuckerberg did not clarify how Meta calculates “monthly active” users for its AI products.
The TikTok ruling could dramatically alter the competitive dynamics of the social media industry, giving Meta a significant edge. As one of TikTok’s fiercest competitors, Meta stands to benefit from any disruption to the platform.
Analysts note that Meta’s diversified product portfolio, including Instagram Reels and Facebook’s massive user base, positions it to capture market share should TikTok face restrictions.