Meta has leapfrogged Nvidia to become the top-performing Magnificent Seven stock of the year as Wall Street cheered the tech giant’s first-ever dividend.
On a frenzied day of trading, shares in the Facebook and WhatsApp owner soared nearly 22 per cent after what was described as a ‘coming of age’ moment for the company.
The rally was spurred by the promise of quarterly dividend payments of 50 cents a share and a £40billion buyback programme, and propelled Meta chief Mark Zuckerberg above Bill Gates on the global rich list.
Zuckerberg is ranked fourth with a fortune of £126billion and Gates is fifth on £114billion.
They still lag behind Elon Musk at number one with a fortune of £162billion and Bernard Arnault and Jeff Bezos who are joint second with £146billion.
The latest moves came after Meta, Amazon and Apple posted their latest results on Thursday night. Microsoft, Tesla and Google-owner Alphabet are the other members of the so-called Magnificent Seven mega-stocks to have reported figures in recent weeks. Nvidia is due to follow suit later this month.
Meta, which owns Instagram as well as Facebook and WhatsApp, has been the stand out performer as far as investors are concerned. It posted a 25 per cent jump in revenues to £32billion for the three months to the end of December and is now returning up to £68billion to shareholders.
Shares raced to a record high yesterday – taking gains for the year so far to 35 per cent. That eclipsed the immense growth seen by chip maker Nvidia in 2024. Nvidia enjoyed a record-breaking surge in market value in January, the largest monthly increase ever, driven by heightened optimism around artificial intelligence.
The world’s most valuable chip maker saw its market value increase by an unprecedented £234billion, surpassing the gain of £196billion seen in May 2023.
But it was Meta’s dividend announcement that seemed to excite Wall Street most this week. Big tech has traditionally avoided shareholder payouts as it focused on pumping cash into innovative projects.
But an increasing number of firms have moved towards divis in a quest to sweeten investors.
Meta is the fourth member of the Magnificent Seven to start a payout after Microsoft, Apple and Nvidia. Yet it is also a sign of confidence from Zuckerberg, the founder and chief executive, that his firm has turned a corner from its post-pandemic slump, which sparked major project cuts and the sacking of 21,000 employees. ‘It is a coming of age,’ said Howard Silverblatt, senior index analyst at S&P. ‘It is a signal that they feel they have, and will continue to have, expectations of higher cash flow.’
And Dan Coatsworth, an analyst at AJ Bell, said: ‘Paying a dividend suggests the company wants to reboot its reputation and be taken more seriously.’
Amazon was also lifted in early trading yesterday – with shares up 8 per cent – after posting its own stellar figures, which saw the online shopping giant rake in annual sales of £451billion.
This was up from the £403billion it made the previous year and came after sales in the Christmas quarter reached £133billion.
Apple shares were more subdued, however, after it warned of a slowdown in China.
Having already lost its position as the world’s largest company by market valuation to Microsoft in recent weeks, it said sales fell 13 per cent in China in the three months to the end of December.
Ben Barringer, technology analyst at Quilter Cheviot, said Apple – once the golden child – is now ‘becoming the laggard of big tech’.
