Meta Platforms Inc stocks closed about 23% higher on Thursday, sparking a rally in the technology sector after Facebook owner Mark Zuckerberg stunned Wall Street by lowering its spending forecast and increasing its stock buyback plan by $40 billion.

The company’s market value increased by more than $90 billion, and the stock had its best day in a decade. The rally also boosted shares of Amazon.com, Apple, and Alphabet, which all have market capitalizations of more than $1 trillion and will report earnings after the market close.

Meta’s decision to cut costs marked a dramatic shift for a company that had spent billions of dollars to make its vision of a futuristic metaverse a reality, even as its core business struggled with stiff competition and a weak advertising market.

After the results, at least 24 analysts raised their price targets on the stock, with several predicting that a combination of lower costs, strong revenue growth, and share buybacks will boost Meta’s earnings per share.

“That is rare,” analysts at Evercorse ISI said, referring to the positive developments. “And stocks react to rare.”

The results on Wednesday also provided some relief to the market following Snap Inc’s earnings meltdown on Tuesday, which sent tech shares lower.

“After Snap’s disaster, the fact that Meta wasn’t quite so bad has brought encouragement to tech mega-caps,” said Fiona Cincotta, analyst at City Index.

“There is also a less hawkish Fed (Federal Reserve), which is also boosting demand for growth and tech stocks generally.”

Meta now expects its 2023 expenses between $89 billion and $95 billion, a sharp drop from its previous outlook of $94 billion to $100 billion, with CEO Mark Zuckerberg calling the period a “Year of Efficiency”.

The forecast includes savings from the 11,000 job cuts announced in November, plans for lower data-center construction costs, and decisions to drop non-critical projects.

“Promising that 2023 will be a year of efficiency was always likely to go down well with investors concerned about the largesse in spending directed towards the unproven potential of the metaverse,” said Russ Mould, investment director at AJ Bell.

Meta’s core social-media business was also showing signs of improvement, with monetization efficiency for short-form video Reels on Facebook doubling and the company on track to break even by the end of 2023.

The company forecasted first-quarter revenue above market expectations and said Facebook’s daily active user base increased to 2 billion from 1.98 billion in the previous quarter.

“Meta is getting its mojo back,” Baird analysts said.

(Adapted from BusinessInsider.com)