Meta post-earnings performance: AI investment influences Q3 2024 earnings expectations
As Meta Platforms prepares to announce its Q3 2024 earnings, the stock is expected to react sharply. Discover insights into past earnings trends crucial for investors.
(AI summary)
Meta-verse: navigating stock highs and lows
Meta Platforms (Meta), the world's largest social media company, is set to release its third quarter (Q3) 2024 financial results on 31 October. The company has seen varied share price reactions following earnings reports, showing volatility across different time frames.
Meta is poised for further share gains in the digital advertising market as a result of significant investment in artificial intelligence (AI), which would be a positive sign for investors. This article explores key share price trends post-earnings and what they mean for investors.
Key financials
Expectations for Q3
- Revenue: $40.3 billion
- Revenue growth: 17.9% year-on-year (YoY)
- Net income: $13.5 billion
- Earnings per share (EPS): $5.23
Comparison to previous quarter
- Revenue: $39.07 billion
- EPS: $5.16
Post-earnings performance analysis
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Immediate reactions (one day)
Meta’s stock often sees sharp movements on the day earnings are released, with the largest jump in the first quarter (Q1) 2022 at over 25%. On the flip side, Q3 2022 saw a drop exceeding 20%, showing how investor sentiment swings based on expectations. More moderate reactions, like the fourth quarter (Q4) 2023 and Q1 2024, suggest performance aligned with forecasts
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Short-term adjustments (one week)
Within one week, the volatility generally reduces. For example, Q1 2022 saw initial gains tempering slightly by week’s end. However, Q3 2022 continued to fall, indicating persistent concerns. Positive day-one movements, such as the second quiarter (Q2) 2023 and Q4 2023, carried through the week, signalling sustained investor confidence
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Medium-term trends (one month)
Longer-term shifts often show clearer trends. Q4 2022 continued to slide, reflecting broader concerns, while Q4 2023 experienced delayed growth, showing improved investor confidence over time. Q2 2023 saw steady gains throughout, indicating growing market support for Meta's strategy
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Overall patterns
Meta’s share price is highly reactive to earnings releases. Strong quarters, like Q1 2022 and Q2 2023, triggered substantial one-day gains, often followed by steady growth. However, weaker quarters, such as Q3 2022, saw declines that persisted for weeks, reflecting deeper market concerns
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Implications for investors
Meta’s earnings reports are key triggers for price changes. Immediate reactions can be sharp, but one-week and one-month trends give a clearer view of investor sentiment. Short-term traders may find opportunities in initial volatility, while long-term investors should consider the broader market reaction before making decisions.
Meta's post-earnings performance chart
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