By Aditya Soni

(Reuters) – Shares of Meta Platforms Inc rose 11% on Thursday after the Facebook owner dazzled Wall Street with an earnings report that showed progress toward the “year of efficiency” and a return to growth, thanks to AI-powered content recommendations.

The company is set to add nearly $60 billion to its market valuation, if premarket earnings hold up. The rally also lifted other technology companies, from Snap Inc and Pinterest Inc to Inc by as much as 3.3%.

“If you want to be treated and valued as a growth stock, you need growth! And this is precisely what Meta delivered by returning to growth… just as questions about a possible recession are growing stronger,” said the analyst at Bernstein Mark Shmulik in a note. .

Shmulik was one of 27 analysts who raised their price targets on Meta, raising the median view to $260, which is a nearly 25% advantage against a stock that is already up more than 70% this year to lead the profits among big tech companies.

Meta beat expectations for first-quarter profit and revenue, which rose for the first time in nearly a year, the latest sign that the American tech giants are emerging from a slump that has led to tens of thousands of layoffs.

The results also underscored the growing importance of AI, with CEO Mark Zuckerberg saying the technology was helping drive traffic to Facebook and Instagram and earn more ad sales.

“We believe AI has played a crucial role in Meta’s shift from displaying a more limited set of friends, family and followed content to a nearly unlimited set of recommended content now available on Reels and Feed,” JP Morgan analysts said. .

Zuckerberg also said the company, which has undergone several costly overhauls to bolster its core business, is no longer far behind in building out its AI infrastructure.

“The year of efficiency (now) paves the way for the AI ​​offense,” said Rohit Kulkarni of Roth MKM.

(Reporting by Aditya Soni in Bengaluru; Editing by Shinjini Ganguli)

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