Meta Platforms Inc shares closed about 23% higher on Thursday and helped spark a rally in the technology sector after the Facebook owner floored Wall Street by slashing its spending forecast and boosting its stock buyback plan by $40 billion.

The company added more than $90 billion to its market value and the stock logged its best day in a decade. The surge also lifted shares of Amazon.com, Apple and Alphabet, all of which sport valuations of more than $1 trillion and will report earnings after market close.

Meta's move to rein in costs marked a dramatic shift for a company that has spent billions of dollars to turn its vision of the futuristic metaverse into a reality, even while its core business reeled from stiff competition and a weak advertising market.

At least 24 analysts boosted their price targets on the stock after the results, with several saying that a combination of lower costs, upbeat revenue growth and share buybacks will drive up 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 after an earnings meltdown at Snap Inc on Tuesday that had 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."

"YEAR OF EFFICIENCY"

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 reflects savings from the 11,000 job cuts it announced in November, plans for lower data-center construction expenses and moves to drop non-crucial 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.

There were also signs that Meta's core social-media business was getting back on track, with monetization efficiency for short-form video Reels on Facebook doubling and the business being on track to break-even as soon as end of 2023.

The company, which forecast first-quarter revenue above market estimates, also said that Facebook's daily active user base grew to 2 billion from 1.98 billion in the prior quarter.

"Meta is getting its mojo back," Baird analysts said.

(Reporting by Medha Singh and Aditya Soni in Bengaluru; Editing by Vinay Dwivedi)