Shares of Facebook Inc touched a record high on Thursday on the back of overwhelmingly positive quarterly results, adding more than $27 billion to its market value.
The world’s biggest online social network posted a 71 percent surge in second-quarter profit and a 50 percent jump in mobile ad sales, allaying investor concerns that ad revenue growth was peaking as it runs out of space to display ads.
Shares rose 6 percent to $175 in early trading, adding gains worth twice the market capitalization of rival Twitter Inc (TWTR.N).
Facebook’s stock slipped as much as 2 percent on May 4, a day after the company posted first-quarter results and said ad revenue growth was expected to come down significantly over the rest of 2017.
Ad sales growth did slow to 47 percent in the June quarter, after a 51 percent increase in the March quarter, but investors brushed it aside, looking ahead to new growth drivers – WhatsApp, Messenger and video.
Facebook cut its forecast for expense growth even as it said it was moving to diversify its revenue stream by investing in initiatives such as video and TV-style programming.
Chief Executive Mark Zuckerberg said he expected video to become the “primary driver” of revenue over the next few years.