Meta is slashing its costs by another $4 billion, and investors are thrilled
- Meta said it would slash its spending in 2023, with Mark Zuckerberg touting an efficiency drive.
- Investors cheered, sending Meta's stock up nearly 19% in after-hours trade.
Meta said Wednesday it would put the brakes on spending this year. Investors reacted with a cheer, sending the stock nearly 19% higher in after-hours trade.
The company said it expected capital expenditures to fall by $4 billion from what it had previously expected.
And CEO Mark Zuckerberg said he was calling 2023 the "year of efficiency." That means more job cuts — and lower operating costs — could also be in the pipeline after Meta already cut 11,000 jobs in November.
Some Wall Street analysts had been expecting the cut to capital expenditure spending, but Meta delivered an even sharper-than-expected cut. It now expects to spend between $30-33 billion compared to its previous estimate of $34-37 billion. Meta announced last year that it was pausing a number of its data center redesigns, including ones in Denmark and Texas. The Silicon Valley company also said it was canceling some projects to further meet new budget goals.
Analysts at UBS said in a note that the earnings hinted at even more cuts to come. They said shares were "under-owned" — or, in other words, that it's a good time to buy. The company itself said it would embark on a $40 billion stock buyback.
That's all music to Meta investors' ears. And it also helps Mark Zuckerberg's net worth crawl back from the depths — if the stock gains stick — after it's taken a big hit over the past year.