Wall Street is once more enamored with Meta Platforms Inc.

The stock price of the firm increased on Thursday, rising about 14% as investors welcomed Meta’s focus on AI and cost-cutting. Their enthusiasm has already helped the social media giant almost double in value by 2023.

If gains continue, Meta, whose stock was trading at a more than one-year high, will surpass Nvidia Corp. as the best-performing company in the S&P 500 index (.SPX) on a year-to-date basis and add about $80 billion to its market capitalization.

The surge also increased the value of other internet firms by up to 3.1%, from Snap Inc. and Pinterest Inc. to Amazon Inc.
“You need growth if you want to be considered and appreciated like a growth stock! And this is precisely what Meta delivered, returning to growth, at the same time when concerns about a future recession are becoming more vocal, according to Bernstein analyst Mark Shmulik.

Shmulik was one of the 27 analysts who boosted their Meta price targets, bringing the consensus estimate up to $270 and adding nearly 13% to the upside for a company that is already outpacing gains among Big Tech companies this year.
The latest indication that American IT companies were emerging from a downturn that has resulted in tens of thousands of layoffs was the fact that Meta surpassed estimates for first-quarter profit and revenue, which increased for the first time in nearly a year.

The outcomes also highlighted the growing significance of AI, according to CEO Mark Zuckerberg, who claimed the technology was assisting in increasing traffic to Facebook and Instagram as well as ad revenue.

“We believe AI has played a crucial role in shifting Meta from showing a more constrained set of friends, family, and followed content to an almost unlimited set of recommended content now available in Reels and Feed,” stated analysts at J.P. Morgan.

The company, which has undergone a number of costly overhauls to support its main business, is no longer behind in developing its AI infrastructure, according to Zuckerberg.

“Year of efficiency paves the way to AI offense,” stated Rohit Kulkarni of Roth MKM.

However, several investors had doubts about the share surge.

Although the results exceeded expectations, according to Eric Schiffer, CEO of the private equity company Patriarch Organization, they arrived at a time when expectations were already low and prices were excessively high given the prognosis for the economy.

After a disappointing 2022, shares of the major IT giants in America, including Apple Inc., Microsoft Corp., Amazon.com, and Alphabet Inc., have increased by almost 25% so far this year.

“Big Tech could be in for a tough second half,” Schiffer warned, adding that now was a good moment for investors to short their shares.