Facebook shares rallied an impressive 30% Thursday, allowing the stock to book its best one-day gain ever. And while shares remain about 10% below the May 2012 IPO price of $38, analysts are predicting that Facebook is finally on its way to reaching, and even crossing, that threshold.
"Facebook delivered its strongest quarter yet as a public company -- results that we think could be thesis-changing for many," said Doug Anmuth, a JPMorgan analyst who boosted his price target to $44 a share from $35.
Investors and analysts are most impressed by Facebook's growing strength in mobile advertising -- a part of the business they were initially most concerned about since Facebook lacked a clear strategy for mobile advertising despite the rapidly growing number of people using Facebook on their mobile phones and tablets.
"One year into Facebook's mobile advertising efforts, mobile has increased from zero to 41% of total ad revenue," Anmuth highlighted in a note to clients.
While the improvements have been gradual, Facebook blew everyone away this past quarter by generating 50% more in mobile ad revenue than what Wall Street was expecting.
Even after that stellar quarter, analysts say growth should remain strong as Facebook continues to shift toward more social ads that will become increasingly valuable to advertisers.
Analysts at JMP Securities, who increased their share price target to $38, said that social media giant's second-quarter results suggest that "Facebook is increasingly becoming a 'must buy' for advertisers."
Goldman Sachs analysts were also excited by Facebook's significant improvement in mobile advertising. They put a bullish price target of $46 on Facebook shares.
"We continue to believe Facebook is at the center of the mobile ad revolution and see considerable opportunity for it to drive higher pricing on its ad units as brand and direct marketers alike take advantage of its broad reach and precise targeting," said Goldman analyst Heather Bellini.
As Facebook (FB) shares surged, a number of investors were getting in on the action. Over 360 million shares of Facebook had exchanged hands Thursday, more than seven times the stock's average daily trading volume.
The day's surge pushed the value of Facebook to more than $80 billion, up from just over $60 billion as of Wednesday's closing bell.
Facebook's advance was also getting plenty of attention on Twitter.
Don't want to jinx it, but I'm about to break even on my IPO day $FB investment! I'm still LONG—
Ross Sheingold (@RossSheingold) July 25, 2013
$FB hasn't even started off-site ads yet. $FB creates the most relevant ads. Advertiser's will pay a premium. $FB continued rev growth.—
Fibo Waves (@Fibowaves618) July 25, 2013
Mobile advertising makes up 41% of all revenue at Facebook now. Remember the pundits who swore $FB wouldn't be able to monetize mobile?—
Joe McCann (@joemccann) July 25, 2013
Despite the solid results and big run-up, however, some in the Twitterverse remained skeptical of Facebook's future.
$FB what a hole that will one day implode. Stupid money, but congrats to those riding the wave.—
(@TraderJive) July 25, 2013
Monster rally in $FB Facebook. I'm not involved but still a doubter, don't like long term revenue prospects—
Steve Cortes (@CortesSteve) July 25, 2013
$FB up 24%. Still not sure if I will ever be in the green with that buy.—
Matthew Kammerer (@mkammerer) July 25, 2013
Still, plenty seemed to regret not having bought Facebook shares sooner.
Almost choked when I saw $FB soar this morning. I wanted in so bad at $19. Missed it.—
(@MarkinCHS) July 25, 2013
Wish I bought $FB right about now—
Kyle Russell (@KRussell142) July 25, 2013
Other social media stocks were also higher on the back of Facbeook's strong quarter. Chinese Internet social media platform YY (YY) jumped more than 11%, while Zynga (ZNGA) shares jumped 6%. LinkedIn (LNKD) and Yelp (YELP) shares rose more than 3%.
Noodles & Co. must be carbo-loading. Shares of the casual restaurant chain have been on quite the run since making their public debut last week.
The stock more than doubled on Friday -- its first trading day -- and is up another 25% Tuesday thanks to kind words from CNBC's Jim Cramer on his Monday evening show. The Mad Money host said that Noodles & Co. (NDLS), which offers dishes ranging from MOREHibah Yousuf - Jul 2, 2013 3:06 PM ET
Tesla's stock soared into record territory Monday after the electric car maker received another upgrade from Wall Street analysts.
Tesla (TSLA) shares ended the day at a record $117.18, gaining more than 9%.
The rally came after analysts at Jefferies raised their price target to $130, saying the company is likely to report stronger-than-expected sales of the new Model S this year.
Tesla's stock price has exploded. It's gained a whopping 240% in the past MOREBen Rooney - Jul 1, 2013 4:45 PM ET
Federal law enforcement officials arrested a Florida man Tuesday for allegedly defrauding investors by telling them he had access to shares of Facebook before its initial public offering.
The U.S. Attorney's office in New York said Craig Berkman, 71, received a total of $8 million from investors who thought they were investing in Facebook (FB) prior to the social network's IPO last year.
Berkman also allegedly misled investors about his access to MOREBen Rooney - Mar 19, 2013 3:49 PM ET
In the biggest IPO since Facebook, animal health company Zoetis generated strong demand from investors early Friday.
Shares of Zoetis (ZTS) surged as much as 22% in its debut on the New York Stock Exchange.
The company, which spun off from pharmaceutical giant Pfizer (PFE), sold 86.1 million shares at $26 apiece late Thursday. The stock traded as high as $31.74 before easing slightly but still remained above the IPO price.
The offering MOREBen Rooney - Feb 1, 2013 10:52 AM ET
Norwegian Cruise Line (NCLH) sailed more than 30% above its initial public offering prices when its shares debuted on the Nasdaq (NDAQ) Friday.
The third largest cruise ship operator in North America sold 23.5 million shares for $19 apiece -- slightly better than the estimated range of $16 to $18.
Norwegian Cruise Line plans to use part of the $446 million it raised to pay down some of its $3.1 billion MOREMaureen Farrell - Jan 18, 2013 11:49 AM ET
Facebook (FB) stock rallied nearly 4% Wednesday, crossing $30 a share for the first time in six months.
The social network sent media invitations late Tuesday for an event at its Menlo Park, Calif. headquarters on January 15. The invitation called for reporters to "Come and see what we're building," fueling speculation that the company will make a major product announcement.
Hitting $30.28 Wednesday, the highest level since mid-July, shares of Facebook are MOREHibah Yousuf - Jan 9, 2013 12:48 PM ET
SolarCity (SCTY) is shining on its first day of trading.
In its debut on Nasdaq (NDAQ) Friday, SolarCity closed 47% above its $8-a-share initial public offering price.
To get that pop, SolarCity was forced to scale back its expectations. The company had originally tried to price its offering between $13 and $15, which would have given it a valuation close to $1 billion, and raised $141 million.
Even though the company upped MOREMaureen Farrell - Dec 13, 2012 12:50 PM ET
YY, the first Chinese company to brave the U.S. initial public offering market since April, was expected to meet a wary investor base Wednesday. Yet YY's (YY) stock managed to rise 10% in its debut on Nasdaq (NDAQ).
A Chinese Internet social media platform with a focus on gaming and video chats, YY, priced its offering at $10.50, the low end of its expected range. The company raised $82 million for MOREMaureen Farrell - Nov 21, 2012 11:04 AM ET
Shares of home furnishing retailer Restoration Hardware (RH) surged in their debut on the New York Stock Exchange Friday morning.
The retailer raised $122 million in its IPO, which priced at $24 a share -- the high end of its estimated range. It will use the bulk of the proceeds to pay down debt and pay management fees to its private equity owners -- Catterton, Tower Three and Glenhill -- MOREMaureen Farrell - Nov 2, 2012 12:35 PM ET
Not a member yet?Sign up now for a free account
|Don't fight it. Bitcoin has a bright future|
|Teen millionaire helping Yahoo become cool again|
|"The Hobbit" dispute sparks lawsuit|
|Five things you didn't know about Bernie Madoff's epic scam|
|Stocks falter as budget deal raises taper risk|