Meta Platforms (META) opened higher Tuesday after lawmakers in both the House of Representatives and the Senate passed legislation that will ban rival social media app TikTok in the United States.
The TikTok ban was added to a larger bill that provides $95 billion in aid to Ukraine and Israel by the House over the weekend and passed there Saturday by a vote of 360-58. On Tuesday, the bill cleared the Senate, 79-18, and now heads to the desk of President Joe Biden, who has said he will sign it.
The bill gives TikTok parent ByteDance up to one year to sell its stake in the popular social media platform.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The motivations [for the TikTok bank] are around concerns that China could misuse American user data," says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. While the broader ramifications for the tech sector are unknown, Streeter says that the passage of this bill is "a clear signal of the U.S.' willingness to crack down on big tech, when it's deemed unsafe."
Streeter adds that the impact for other social media platforms are likely limited because this is more a political move. "That said, it's still something the likes of Meta will be keenly monitoring," she notes. "Although the bill is progressing, nothing is set in stone – TikTok is likely to mount a legal challenge to the ruling."
TikTok ban hits just ahead of Meta earnings
Indeed, while Meta Platforms, the parent company of Facebook, Instagram and WhatsApp, initially jumped on the news, it quickly erased these early gains ahead of the company's first-quarter earnings report, which is due after Wednesday's market close.
The event is one of the most anticipated on this week's earnings calendar. Analysts' expect Meta to report first-quarter revenue of $36.2 billion and earnings per share of $4.32, representing growth of 26.2% and 96.4%, respectively, from the year-ago period, according to Yahoo Finance.
BofA Securities analyst Justin Post is bullish on Meta ahead of the report. His firm has a Buy rating on the Magnificent 7 stock and a $550 price target.
"We remain positive on Meta and reiterate our thesis that Reels, Messaging, and AI driven ad improvements are still early, and could lead to positive product surprises & revenue momentum in 2024," Post said in an April 19 report. He added that the firm thinks "Meta's AI assets are underappreciated in the stock price with stock at 16 times core 2025 earnings per share."
Wedbush is also bullish on the communication services stock. In an April 11 report, the research firm reiterated its Buy rating and raising its price target to $570 from $520.
"We think the company is well positioned heading into Q1 results given positive feedback from advertisers in our survey work and healthy underlying demand trends with particular strength in the social vertical," Wedbush said. "We are raising our estimates ahead of the Q1 report and now expect revenue in the quarter of $36.9 billion (+28.8% year-over-year), a roughly 3% increase from our prior estimate."
According to S&P Global Market Intelligence, the consensus analyst target price for Meta stock is $541.20, representing implied upside of 10% to current levels. Additionally, the consensus recommendation is a Buy.
Related Content
-
The 'Vinyl Rule' of Retirement: Plan for Two Sides in Your Next ActBecause “Life is what happens when you’re busy making other plans.”
-
Five Destinations for Active and Chill Travelers AlikeWhether you reach for a paddleboard or a lounge chair, find your groove in a location that offers something for both kinds of travelers.
-
I'm a Financial Planner: Here Are Five Phases of Retirement Planning You Have to Get RightA solid retirement plan is a must, but you can't go halfway. Neglecting just one area of your plan could cause the whole thing to collapse.
-
An IRS Enrolled Agent's Top 10 Reasons to Stop Doing Your Own TaxesTaxes can get complicated quickly, and the more money you have, the tougher they tend to be. So, if you have any of these 10 tax situations, don't risk it.
-
Stocks Slip as Job Growth Stalls: Stock Market TodayThe August jobs report came in much weaker than expected, while the unemployment rate ticked higher.
-
Dismal August Jobs Report Offers Rate-Cut Relief: What the Experts Are SayingThe August jobs report came in much lower than expected, lifting the odds that several rate cuts will come through by year's end.
-
Greed, Fear and Market Volatility: A Financial Adviser's Guide to Keeping Emotions Out of Investment DecisionsDon't panic! And don't be so confident in the stock market that you overlook risk. Instead, be logical. Your retirement security could depend on it.
-
Want a Financial Adviser Who Shares Your Faith? Look for One With a CKA DesignationFinancial professionals with a Certified Kingdom Advisor certification are committed to integrating biblical principles with sound financial advice.
-
S&P 500 Hits New High on Jobs Friday Eve: Stock Market TodayThe S&P 500 hit a new all-time closing high and most of the stocks in the Dow Jones Industrial Average were up the day before a critical jobs report.
-
SPACs, SMRs and How to Invest in the Nuclear InsurgencyBig nuclear deployments are in process, but small modular reactors could be a better way to meet rapidly rising electric power demand.
