Since the 2022 bear market bottomed nearly four years ago, Wall Street’s historic rally has been driven by two catalysts: the evolution of artificial intelligence (AI) and the leadership of the “Magnificent Seven.” The beauty of the Magnificent Seven is that they all possess one…
more sustainable competitive advantages, providing them with ample cash flow to undertake intriguing growth initiatives. This includes social media maven Meta Platforms (NASDAQ: META), which is among the 13 publicly traded companies on U.S. exchanges to be valued at north of $1 trillion
But sometimes high-growth initiatives require sacrifices. Mark Zuckerberg’s Meta appears set to abandon a $174 billion investment that’s had a decisively positive impact on its bottom line to further its AI ambitions. Meta Platforms may be on the verge of axing this $174 billion investment Make no mistake: Meta’s billionaire boss has aggressively invested in several high-growth initiatives, including the metaverse and, more recently, artificial intelligence.
But it’s Meta’s hearty share repurchase program that’s done some heavy lifting over the last decade. Although no share buybacks were undertaken in 2016, the company has been purchasing its own stock on a regular basis ever since: – 2017: $1.976 billion in full-year share buybacks – 2018: $12.879 billion – 2019: $4.202 billion – 2020: $6.272 billion – 2021: $44.537 billion – 2022: $27.956 billion – 2023: $19.774 billion – 2024: $30.125 billion – 2025: $26.248 billion Collectively, Meta Platforms has spent approximately $174 billion to retire nearly 12.7% of its outstanding shares. For companies with steady or growing net income, such as Meta, a steadily declining share count can result in higher earnings per share over time.