1. Meta-platforms Facebook parent firm Meta Platforms started the year strong. Investors were thrilled when the company reported fourth-quarter profitability and offered a quarterly dividend. Advertising market recovery drove Meta's results.
After stagnating between late 2022 and mid-2023, fourth-quarter ad revenue jumped 24% to $38.7 billion. Annual revenues rose 25% to $40.1 billion. But Meta Platforms has also made major measures to improve its advertising business.
That's crucial to the company's future. Meta increased AI application throughout their products to improve business efficiency. Late 2022 saw the launch of Advantage+, an AI-powered marketing campaign automation platform. Meta Platforms has introduced generative AI features to enable companies test different images and backgrounds for their adverts.
Generative AI could boost Meta Platforms' expansion beyond advertising. WhatsApp corporate messaging is another revenue source the internet giant is developing. Meta Platforms has 3.98 billion MAUs, up 6% year over year. Several platforms benefit from the network effect.
Great example: Facebook. There is no social media platform with a wider ecosystem for friends and family. It becomes more appealing with more participants. Thus, Meta should retain most of its users and develop new methods to monetize it, resulting in strong revenue and earnings growth. Meta Platforms will keep beating the market.
2. Spotify Tech Spotify Technology is the top music streaming service. That's impressive given the company's competitors. Spotify competes with digital heavyweights Apple, Amazon, and Alphabet. They could lose money while collecting users to drive pure-play competitors like Spotify out of town due to their resources and ecosystems.
No such thing has happened. Spotify held 31.7% of the music streaming industry (by subscription) in the third quarter, almost as much as Apple, Amazon, and Alphabet. Spotify reported 602 million MAUs in Q4, up 23% year over year. It closed with 236 million paid customers, up 15% year over year. Spotify's 3.7 billion euros in revenue rose 16% year-over-year.
Spotify isn't profitable yet, but it's improving. For instance, it reduced its Q4 2022 operational loss from 231 million euros to 75 million euros. Spotify's financial results should improve as it adds users. Fourth-quarter MAUs and premium subscribers increased by double-digits across all regions.
Spotify's podcast business has grown rapidly in recent years. Another major possibility for the corporation to boost advertising revenue. Finally, Spotify revealed its strategy of boosting prices in important markets. It did in the U.S. last year. Spotify shows network effects. Its massive collection of content and network of podcast makers attract more users, making the platform more desirable to creators and users.
This has allowed Spotify survive and thrive in this competitive market, but it hasn't peaked. Shares have more than doubled in the past year, but investors looking beyond five years still like them.
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