"Great win by Alexander Van der Bellen in Austria. Populism is not Europe's fate," Valls, who is expected to run for president in next year's election, tweeted after Van der Bellen's rival Norbert Hofer conceded defeat.
The outcome of the Austrian election is being closely watched in France, where far-right leader Marine Le Pen is riding high in polls five months before the French begin voting for Francois Hollande's successor.
Le Pen was among the first to react.
Hollande last week announced he would not seek re-election, paving the way for Valls to throw his hat in the ring for the Socialist nomination.
Valls is expected to announce his candidacy early in the week.
Polls currently show the left being eliminated in the first round of the election, with the conservative candidate Francois Fillon and Le Pen duelling for the presidency in a second round.
The Socialists are hoping to prove the polls wrong and to wrest the run-off spot from Le Pen.
"The far right beaten in Austria. The nationalist-populist wave can be contained," party leader Jean-Christophe Cambadelis tweeted.
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