Meta's stock just wrapped up its ninth straight monthly gain as Wall Street cheers cost cuts

A twelvemonth ago, Meta's banal was successful the midst of a nosedive arsenic Wall Street grew acrophobic that threats to the concern were progressively existential.

But aft Mark Zuckerberg's company, formerly known arsenic Facebook, reported better-than-expected second-quarter results past week and issued optimistic guidance, Meta shares jumped to their highest since aboriginal 2022.

Despite slipping connected Monday, Meta's banal climbed 11% successful July, wrapping up its ninth consecutive period of gains, by acold the longest specified agelong since Facebook's IPO successful 2012. The banal is present wrong 17% of its grounds precocious from September 2021.

Driving the melodramatic rebound is simply a bid of cost-slashing measures Meta implemented successful precocious 2022 and aboriginal 2023 resulting successful astir 21,000 occupation cuts, and a betterment successful Facebook's online advertisement business, which is yet backmost to double-digit maturation aft Apple's iOS privateness alteration and a sputtering system led to 3 consecutive quarterly income declines. Meta's investments successful artificial quality are besides paying off, much radical are watching short-videos connected the company's TikTok-like Reels product, and the caller debut and aboriginal adoption of the Twitter rival called Threads has fixed investors anticipation that Meta tin yet crook the messaging app into a large hit.

Zuckerberg said connected past week's net telephone that he's "quite optimistic" astir Threads and its trajectory, noting that the merchandise "was built by a comparatively tiny squad connected a choky timeline." He added that Threads "really blew up and created a large accidental immediately," but went connected to suggest that the institution is obscurity adjacent to trying to monetize the app.

"With easing comps, continued AI-driven improvements to targeting capabilities, and respective breathtaking nascent products and monetization initiatives, we deliberation the ongoing Meta turnaround has a agelong runway ahead," wrote analysts astatine Canaccord Genuity successful a enactment aft Meta's net report. They person a bargain standing connected the stock.

Meta has been the second-best performing banal successful the S&P 500 this year, down lone Nvidia. Last twelvemonth it was 1 of the worst performers successful the index, losing two-thirds of its value.

Kicking disconnected the downward spiral were the stunning revelations successful precocious 2021 from erstwhile Facebook worker turned whistleblower Frances Haugen. Haugen's leaking of thousands of pages of interior documents showed that Facebook had failed to code assorted problems affecting its household of apps, specified arsenic Instagram's publication to the intelligence wellness issues of teenagers.

The nationalist outrage implicit the revelations enactment Zuckerberg erstwhile again successful the crosshairs of lawmakers, further damaging Facebook's estimation aft years of concerns with however the level handled misinformation.

As Facebook shares began their descent, Zuckerberg renamed his institution to Meta, and told investors of his program to walk billions of dollars a 4th processing the virtual and augmented world technologies needed to bring the alleged metaverse to beingness successful the distant future.

The biggest occupation was Apple. Although Zuckerberg and different institution executives had warned that the iOS privateness update would wounded Facebook's quality to efficaciously people ads, investors lone digested the world of the concern arsenic earnings reports came up short.

The institution besides felt the repercussions of the warfare successful Ukraine and Russia's blacklisting of Facebook and Instagram successful the country. While Russia lone represented astir 1.5% of wide sales, Meta needed each the gross it could drum up with advertisers pausing spending due to the fact that of the shaky system and contention picking up from rival TikTok.

Meanwhile, Wall Street was increasing progressively acrophobic astir the company's profligate spending connected the metaverse.

Then came the outgo cuts and Zuckerberg's promise aboriginal this year that 2023 would beryllium the "year of efficiency."

Zuckerberg antecedently told employees that Meta was "taking a fig of further steps to go a leaner and much businesslike institution by cutting discretionary spending and extending our hiring frost done Q1."

"I privation to instrumentality accountability for these decisions and for however we got here. I cognize this is pugnacious for everyone, and I'm particularly atrocious to those impacted." Zuckerberg wrote successful November of past year.

Under Meta's cost-cutting plans, Zuckerberg said this twelvemonth that the institution would region layers of mediate absorption that helium believed was slowing down important decisions and the institution would beryllium "proactive connected cutting projects that aren't performing oregon whitethorn nary longer beryllium crucial."

The financials started looking amended successful the archetypal quarter, arsenic sales grew 3% from the anterior year. Much of the bounce was coming from China, wherever a nationalist easing of pugnacious Covid policies led to a boom of Chinese companies spending heavy connected Facebook and Instagram ads to people users worldwide.

Meta executives pointed to respective affirmative signs that its concern was connected the mend. More companies, peculiarly retailers, were spending wealth connected Meta's AI-powered Advantage Plus service, helping reconstruct the effectiveness of its online advertizing system.

The institution touted the expanding usage of its short-video Reels service. Reels continues to grow portion TikTok's aboriginal successful the U.S. remains uncertain arsenic lawmakers scrutinize the app, which is owned by China's ByteDance, for alleged nationalist information issues.

Even arsenic the banal pushes higher, plentifulness of concerns stay astir the aboriginal of Meta.

The company's Reality Labs unit, location to its metaverse investments, mislaid $13.72 cardinal past twelvemonth and another $3.7 cardinal successful the archetypal quarter of this year, each portion income stay miniscule. Apple has precocious jumped into the VR marketplace with promises of a caller headset. On the advertisement side, Amazon's business continues to ramp up, and TikTok could inactive beryllium a menace if it tin flight regulatory woes.

Governments astir the satellite are inactive scrutinizing Meta implicit information privateness and related issues. Meta CFO Susan Li said past week that determination are "broadly speaking, expanding ineligible and regulatory headwinds successful the EU and the US that could importantly interaction our concern and our fiscal results."

But for the clip being Meta investors are celebrating, and the representation is clearly overmuch brighter than it was 12 months ago.

WATCH: Reels, ads and cost-cutting boost Meta banal to 17-month high