Why Facebook Stock Skyrocketed

The social network jumped again on a flawless earnings report. Here's what you need to know.

Jeremy Bowman
Jeremy Bowman
Jan 30, 2014 at 8:08PM
Technology and Telecom

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our thesis.

What: Shares of Facebook (NASDAQ:FB) took off today, gaining as much as 17%, and closing up 14% after posting another blockbuster earnings report.

So what: The social networking giant blew Wall Street out of the water, as revenue soared 63%, to $2.59 billion, well ahead of the analyst consensus at $2.33 billion. Meanwhile, adjusted earnings jumped from $0.17 a share a year ago to $0.31, beating estimates at $0.27. Mobile growth was particularly robust for the year, as daily mobile active users increased 49%, and monthly mobile users grew 39%. In a brief statement, CEO Mark Zuckerberg simply said: "It was a great end to the year for Facebook. We're looking forward to our next decade and to helping connect the rest of the world."

Now what: Facebook's growth continues to seem unstoppable. The company that was widely maligned after its 2012 IPO has now seen shares more than triple from their bottom that summer, as the social network has mastered the mobile ad game and seen revenue growth pick up. The market seems to be particularly excited about the potential of Instagram and video ads, as well, which are promising untapped sources. Apple's falter earlier this week may also show that the future of tech is in the hands of information stewards like Google and Facebook, and not with those like the iPhone maker.