Meta Stock Has Soared Almost 50% Over A Year But Now The Company Is Slashing Staff Stock Awards As It Braces To Face OpenAI, Amazon And Others In AI Race
Meta Platforms, Inc. (NASDAQ:META) is reportedly cutting stock-based compensation for employees as it pours billions in capex to compete with industry leaders like OpenAI, Alphabet, and Amazon.
What Happened: Meta has reduced its annual equity-based awards by about 10% for most of its employees, affecting tens of thousands of workers, reported the Financial Times, citing several people familiar with the matter.
The equity refreshers, which are a significant part of employee compensation, are distributed annually and vest over four years. The exact reduction varies based on employee location and level within the organization.
Meta did not immediately respond to Benzinga's request for comments.
Why It Matters: The reduction in stock awards comes at a time when Meta reported strong financial results for the fourth quarter of 2024, with revenue of $48.39 billion, surpassing analyst expectations.
Currently, Meta is also facing backlash over performance-based layoffs, which affected approximately 3,600 employees. Some former employees claimed they were unfairly targeted despite having strong performance records.
Previously, Meta CEO Mark Zuckerberg described 2025 as a pivotal year for the company, with plans to invest between $60 billion and $65 billion in AI initiatives.
In fact, big tech companies like Amazon, Meta, Microsoft, and Alphabet are all going all-in on AI and will invest a record $320 billion in AI infrastructure in 2025, with Amazon leading with over $100 billion.
Meta has delivered impressive returns since hitting a low in 2022. The stock is up 13.39% in the past month, 31.92% over six months, and 47.29% year-over-year. Year-to-date, Meta has gained 15.95%.
Despite its strong rally, Meta’s stock remains below the $1,000 mark but is gaining ground. Analysts from Tigress Financial, UBS, and Citigroup have set an average price target of $833.67, implying a potential 20% upside from current levels.
The rapid climb has fueled speculation that Meta could be among the top contenders for a stock split in 2025.
Price Action: Meta Platforms' stock ended Thursday at $694.84, down 1.27% for the day. In after-hours trading, it dipped another 0.020% to $694.70, according to data from Benzinga Pro.
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