Do you know when a kid wants candy and never stops talking about it? That was Mark Zuckerberg with the Metaverse ever since he renamed his company Meta. Yesterday, the stock of Meta showed growth it hasn’t seen for quite a while. It soared a whopping 25% (at the time of this writing.) Why did that happen? I believe Zuckerberg is giving up his stubbornness about the Metaverse. But the real question is, what could affect a Meta stock forecast for 2023?
Zuck damaged Facebook when he renamed it.
That’s how it all started. We all knew Zuckerberg liked the metaverse and acquired Oculus for that reason. We knew he had plans for the metaverse. Wall Street and the world were excited. But then he renamed the whole company. That was such an extreme move that many investors thought he was losing it. Then he teased them further by the continuing mention of how they’re doubling down on the Metaverse.
They laid people off because they believed the focus should switch to the Metaverse. They built products that not many people purchased, like the Meta Quest Pro for $1500. It was just a rollercoaster going down in terms of financials. So as an investor, it looks like a big bet on the metaverse.
Add to that the fact that there was a recession, and you’re having the worst Facebook stock drop.
Let’s say you invested $1000 in Facebook in 2012.
- 2021 – your $1000 becomes $10,000
- 2022 – your $10,000 becomes $3,000
You might say, but that’s still a profit? But you invested in 2012, ten years ago. So it’s not as lucrative as most average tech stocks. For example, Apple would’ve turned your $1000 into $10,000 (at the time of writing this.)
Then Wall Street started believing he was crazy.
Every week you’d look at the stock and find out a new 10% drop or so. It was a sea of red. We’d eagerly wait for the quarterly earning calls to know if they outperformed the estimates to re-invest in them. But how could the Meta team outperform the estimates when almost the whole world believes that they’re in a downfall?
The answer is by working as usual, regardless of Zuckerberg’s vision.
TikTok did not make it any better.
When you subconsciously feel that Meta is in a downfall, you’ll think of using alternatives to Facebook and Instagram, especially if you’re a content creator. If you don’t live in a cave, you’ll know that TikTok is growing massively. Switching your content there would’ve provided you with far more reach and growth.
Every day that passed felt like Meta was being forgotten as Nokia was. But then, Zuckerberg gets on a call with investors on Wednesday, the 1st of Feb.
Zuck said they are starting to care about efficiency.
It’s as if your kid just said they’ll go to school tomorrow. This does not necessarily mean he doesn’t care about candy. But he is acknowledging the world around him and what they care about.
Investors poured billions into Meta. It’s only fair that if they believe Zuck is operating with his own steering wheel, he would occasionally take their advice.
That happened, and one investor started believing in Meta again, then another and another.
Then all of a sudden, Meta’s stock went up.
What will affect the Meta Stock Forecast in 2023
After most stock inclines, the next day, you’ll probably see a decline. These are some of the people who were so patient with Meta stock that they were waiting for a moment to get out of this buy with no loss. If that 20% got them to break even or to get some profit, they’d sell.
There’s something important you need to be aware of. It’s not only Meta. Yesterday, most tech stocks showed growth that was exceptional.
- Apple – 2.73%
- Google – 5.83%
- Tesla – 6.14%
Yet, in order to assess how Meta will do this year and forecast their stock, we’ll take a page out from Warren Buffet’s teaching. Let’s forget that Meta has a stock and treat it as a business.
Will the Meta stock thrive in 2023 (Forecast)?
The only way this could happen is if they get more companies to believe in their vision and advertise on their platforms. Additionally, users keep on coming back and using Facebook and Instagram. I believe that many are not using Facebook as they used to. But Instagram is still a thing.
The real indicator of how their business will perform is by checking out every new feature Instagram is rolling out. Are they growing? If the answer is yes, then you’ve got yourself a reason to believe that Meta will continue growing as a company.
Finally, they’re still the leaders of the metaverse game. If this shows further growth this year, which is predicted by many, then they could also thrive.
As an investor who invests in the stocks of Google, Apple, and Microsoft, I wouldn’t invest in Meta at the moment as it’s unclear in terms of a business. ChatGPT could come and go. Apple will still sell iPhones. Google will still have a search console. Microsoft will still sell windows. But Meta, as a business, relies on Instagram at the moment. I can’t be confident to say that Insta is still a product in ten years.
Note that this is based on my analysis of the business in terms of entrepreneurship. If you intend to sell or buy a stock, I advise you to contact your financial advisor. Some people can afford to bet long-term on Meta, while others should not. Hence, this is not financial advise by any means.
Interested in seeing the Facebook pitch deck that raised their first $400k?
Meet The Author Of This Article
I’m Al Anany. I simply love writing about business and entrepreneurship.
I‘m a 10-year business consultant in Zurich, Switzerland. I love reading books about how Warren Buffet aced the investment world, for example.