What happened
Shares of Meta Platforms (META -0.87%) were climbing today in response to better-than-expected numbers from big tech peers Alphabet (GOOG -2.26%) (GOOGL -2.43%) and Microsoft (MSFT 0.01%) last night.
Though there was no company-specific news out on Meta, investors are anticipating the company's earnings report after hours today, and seem to have bumped up their expectations after the reports from the other FAANG stocks
As of 11:14 a.m. ET, Meta stock was up 2.2%.
So what
Both Microsoft and Alphabet reported modest accelerations in revenue growth from the fourth quarter, showing that the worst of the tech recession could be over. Microsoft's revenue accelerated from 2% in the December quarter to 7% in its just-reported fiscal third quarter, while Alphabet's revenue growth improved from 1% to 3% with the help of weakening currency headwinds.
Since Alphabet is a direct competitor of Meta, its results are likely more influencing Meta's performance than Microsoft's. Alphabet reported a modest 0.2% revenue decline in its advertising business, but that was an improvement from a 3.6% decline in the fourth quarter, another positive sign for Meta.
That could very well signal that Meta's advertising business, which makes up the vast majority of its revenue, reached a nadir in the fourth quarter as well.
The digital advertising sector as a whole has seen growth slow because of a broader pullback in demand over concerns about a recession, so Alphabet's results could harken a recovery for the overall industry.
Now what
We'll learn more when Meta releases its first-quarter earnings report after hours today. Analysts are expecting revenue to dip 0.9% to $27.65 billion and for earnings per share to fall from $2.72 to $2.03. If the company can beat those estimates, the stock could soar tomorrow.
Investors will also be watching to see how the company's recent job cuts have impacted the bottom line.
