Why Facebook Stock Surged Today

What happened

Shares of Facebook (NASDAQ:FB) leaped 8.3% on Wednesday, as investors breathed a sigh of relief that the results of U.S. elections would lessen the risk of regulation on the social media industry.

So what 

Facebook has increasingly come under fire for a host of issues, including privacy concerns and its role in allowing hate speech and misinformation to spread across its network. Yet with the Republicans likely to maintain control of the Senate and Democrats likely to retain the House, the likelihood that antitrust regulators will bring a strong case against Facebook has been reduced.

A person points to an upwardly sloping chart.

Facebook’s stock rose sharply on the first day of trading after Election Day in the U.S. Image source: Getty Images.

A less aggressive regulatory environment could also bring more advertisers back to Facebook’s social media platforms. Many pulled back on their ad spending ahead of the U.S. elections.

Now what

With antitrust issues receding, investors can turn their attention to Facebook’s solid operational performance and intriguing growth prospects. The digital ad titan saw its revenue and earnings per share rise by 22% and 28%, respectively, in the third quarter. 

Better still, much more growth lies ahead. Digital ad sales are projected to exceed $517 billion by 2023, up from $333 billion in 2019, according to eMarketer. 

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