Facebook’s fear factor is overblown

Investors who could pry themselves away from Reddit on Wednesday afternoon found Facebook much more soothing—the company’s results, that is.

The social-media giant reported monster fourth-quarter results. Total revenue grew by 33% year-over-year—well above Wall Street’s estimate—driven by advertising revenue growth of 31%. Given easy comparables as a result of the pandemic, the company said that it expects year-over-year growth rates to remain stable or to accelerate modestly in the first half of 2021. They will appear less flattering, however, in the second half of the year—a time when the company says it also could face pressure from ad targeting and regulatory headwinds.

Facebook has lagged behind the Nasdaq Composite Index and social-media competitors Twitter, Snap Inc. and Pinterest over the last year as such risks loomed. But the company should find relative shelter in its diversity.