What happened

Shares of Meta Platforms (META 2.67%) were rising more than your average tech stock today, rallying 2.5% as of 1:48 p.m. EST.

Meta continues to bounce off its post-earnings lows when it shocked the investment community with aggressive spending plans in the face of a macroeconomic slowdown. Following the stock's big post-earnings decline, however, the company announced thousands of layoffs last week, which seemed to improve investor sentiment.

Then today, a positive analyst note and news of buying on the part of a large investment fund sent shares higher, inching their way back to pre-earnings levels.

So what

Apparently, the new cost-cutting measures in non-core parts of Meta's business were appreciated by at least one analyst. Investment bank Oppenheimer maintained its "buy" rating on Meta shares today, while increasing the firm's price target from $140 to $145.

In addition to the incrementally positive analyst note, Saudi Arabia's Public Investment Fund (PIF) released its 13F disclosure form today. A 13F is when a large investment firm releases its buys and sells from the prior quarter, usually around 90 days after the quarter's end. The large investment fund, which owns stakes in may leading technology companies, increased its stake in Meta last quarter by 10%. That's especially notable, as the filing indicates Meta was the only top-25 holding that the fund increased last quarter.

Unfortunately for the PIF, this increase happened at higher levels prior to last month's disappointing earnings report. Still, the vote of confidence seems to be helping out Meta's stock today, which is up more than the other FAANG names and digital advertisers, with the exception of Netflix.

Now what

With today's rise to about $116, Meta shares are attempting to claw their way back from the recent $88 low and toward their pre-earnings price of around $130.

While the company may be foregoing some future optionality by shuttering early-stage hardware projects, such as Portal and smartwatches, it's probably a good idea that the company is trimming expenses and focusing on both its core digital-ads business and the Metaverse. Those hardware projects were unlikely to lead to lots of incremental growth relative to the company's massive ad business, and while the Metaverse project is highly uncertain in terms of long-term revenue, Meta has made it a huge bet, pouring more than $10 billion per year into making the Metaverse a reality some time this decade. Therefore, concentrating on those two large segments seems prudent.

At least one analyst agrees. Moreover, with Meta still trading at less than 10 times earnings, despite massive losses in the Metaverse, the stock still appears quite cheap, provided it can eventually resume growth in the core ad business after this period of softer demand.