Wall Street heard exactly what it wanted to hear from the Federal Reserve, and that sparked a new rally in the stock market that looked poised to continue on Thursday morning. After having taken the brunt of the bear market hit in 2022, the Nasdaq Composite (^IXIC 0.10%) jumped at the opening bell, up 2.3% as of 9:41 a.m. ET.
A pair of stocks contributed the most to the Nasdaq's rally. Meta Platforms (META -0.52%) and Align Technology (ALGN 0.61%) reported their latest financial results late Wednesday afternoon, and the companies convinced their shareholders that their respective businesses were on the mend after concerns over the past year. Below, you'll learn more about what Meta and Align had to say to investors and why there's so much optimism about what the future could bring to the two growth stocks.
Meta gets back on track
Shares of Meta Platforms rose 19% on Thursday morning. The stock has now doubled from its lows just three months ago, and the social media giant's fourth-quarter financial results convinced investors that it's back to moving in a more sustainable direction.
Meta's numbers reflected the tough environment in advertising that the social media company has struggled through for a while now. Revenue fell 4% year over year to $32.2 billion, and net income of $4.65 billion was down 55% from year-ago levels. Earnings of $1.76 per share weren't quite as good as most of those following Meta stock had hoped to see. Although ad impressions were up 23% year over year, average prices fell 22%.
Yet investors were pleased to see Meta focus on its restructuring, with co-founder/CEO Mark Zuckerberg calling 2023 the "year of efficiency" for the company. After ill-advised forays into more speculative projects, Meta now seems to be concentrating more on its core business, with daily active users hitting the 2 billion mark for the first time ever.
In addition, shareholders were pleased to hear Meta implement a new $40 billion stock repurchase program, supplementing the efforts it has made recently. With Meta having bought back nearly $28 billion in stock during 2022, investors can see how the company itself views its valuation, and that has helped build confidence in its comeback efforts.
Align straightens up
Shares of Align Technology were also sharply higher, rising 25%. The maker of Invisalign clear orthodontic appliances announced its financial performance and also rolled out a new stock buyback program.
Image source: Getty Images.
Like Meta, Align still faced tough comparisons in its fourth-quarter financial results. Revenue of $902 million was down 13% year over year, with weakness both in Invisalign sales and in revenue from its imaging systems and services division. Adjusted net income plunged 40% to $134 million, with adjusted earnings working out to $1.73 per share. For the full year, revenue slipped 5.5%, with adjusted earnings falling more than 30% to $7.76 per share.
However, Align was able to put a positive spin on its results. CEO Joe Hogan noted that with the exception of China, most of Align's global markets stabilized during the period, with consumer trends improving. Sequential improvement from the third quarter of 2022 also marked a potential turning point for the business.
Align expects to capture more growth opportunities in 2023, and it also announced a new $1 billion stock repurchase program to replace the one it intends to complete by midyear. As other growth-oriented companies announce their results, investors are hopeful that their stocks will see similar gains.
