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Why Facebook Stock Surged to a New All-Time High Today

By Joe Tenebruso – Aug 26, 2020 at 7:13PM

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Investors are excited about the social media giant's push into e-commerce.

What happened

Shares of Facebook (META 2.53%) jumped 8.2% to a new closing high of $303.91 on Wednesday, after analysts helped to focus investors' attention on the digital ad titan's massive growth opportunity in e-commerce. 

So what 

On Tuesday, UBS analyst Eric Sheridan reiterated his buy rating on Facebook's stock and boosted his price forecast from $242 to $330. Even after today's move, Sheridan's new target price represents potential gains for investors of roughly 9%.

A person is pointing to an upwardly sloping digital chart.

Facebook's stock hit a new high on Wednesday. Image source: Getty Images.

Sheridan believes Facebook's recent push into e-commerce will be a significant source of additional growth for the social media leader. In May, Facebook partnered with Shopify and other e-commerce companies to launch Facebook Shops, a new online shopping platform. And yesterday, BigCommerce said it's teaming up with Facebook to launch a new feature on Instagram that would allow users to purchase products without leaving the popular photo-sharing app. In turn, Sheridan expects Facebook to become a powerful force in social commerce.

Now what

Facebook is already benefiting from the rise of e-commerce, as many online retailers spend heavily to promote their wares on its social media networks. But Facebook is taking steps to make it easier to make purchases directly from its social media sites, and, in the process, claim a larger share of the online retail industry's profits.

Judging by the stock's recent gains, investors applaud Facebook's e-commerce initiatives.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook, Shopify, and Shopify. The Motley Fool has a disclosure policy.

Stocks Mentioned

Meta Platforms Stock Quote
Meta Platforms
META
$123.49 (2.53%) $3.05

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