Facebook closed above $1 trillion in market capitalization for the first time on Monday, adding to the number of tech companies breaking thresholds despite the pandemic.
Facebook has thus become the fifth U.S. company to hit the milestone, joining Apple, Microsoft, Amazon and Google-parent company Alphabet. Per CNBC, the company’s shares closed up 4.2% at $355.64 after a favorable legal ruling that dismissed an antitrust complaint brought by the U.S. Federal Trade Commission and a coalition of state attorneys general. The move pushed Facebook shares up nearly 5%.
Facebook derives nearly all of its revenue from personalized advertisements that are shown to users of the Facebook and Instagram social networks. The company also has a burgeoning hardware business where it is building products like the Portal video-calling device, Oculus virtual-reality headsets and smart glasses, which are set to be released sometime in 2021.
Facebook held its initial public offering in May 2012, debuting with a market cap of $104 billion.
The company suffered a colossal 19% drop in 2018 after posting disappointing revenue and user figures for the second quarter of that year. That drop came amid a number of scandals that year, including data leaks, fake news and, most notably, the Cambridge Analytica scandal — in which a data firm improperly accessed the data of 87 million Facebook users and used it to target ads for Donald Trump in the 2016 presidential election.
Despite the scandals, Facebook was able to bounce back and has continued to grow its user base and steadily increase its average revenue per user. The stock price is now up more than 90% since July 27, 2018.
The company is still working on so many ideas across its platforms, and they’re believed to have the potential to accelerate further growth. CEO Mark Zuckerberg announced last week the launch of new commerce features to support businesses and make shopping easier. They include Shops on WhatsApp and Marketplace, Instagram Visual Search and Shops Ads; Instagram Visual Search that helps buyers discover products based on images.
Cowen analysts had predicted in August, when its stock rose to $280.82, that the company would be the next to cross the $1 trillion milestone, given how its stocks were moving despite the pandemic.