Meta Platforms Inc. (NASDAQ: META) reached an all-time intraday high of $614 on December 3, 2024, surpassing its previous peak of $601.20 set on October 30.
At the close of the latest trading session, Meta’s stock stood firm at $614, reflecting a remarkable one-month gain of 9% and a year-to-date (YTD) increase of 77%.
This performance cements Meta’s position as one of the top-performing mega-cap tech stocks, driven by strong financial results, advancements in artificial intelligence (AI), strategic global projects, and a recalibrated political approach as CEO Mark Zuckerberg seeks to influence tech policy under President-elect Donald Trump’s administration.
Picks for you
Earnings beat fuels investor optimism
Meta’s third-quarter earnings showcased a robust 18.9% year-over-year increase in revenue to $40.6 billion, outpacing analysts’ expectations of $40.2 billion.
This growth was driven by a 7% rise in ad impressions and an 11% increase in the average price per ad, highlighting the effectiveness of Meta’s advertising strategies.
Diluted earnings per share (EPS) soared 37.4% year-over-year to $6.03, significantly above the consensus estimate of $5.22. This solid financial performance reflects Meta’s strong operational execution and continued focus on optimizing profitability.
AI revolution powers growth
Meta’s investments in AI are paying off, bolstering both user engagement and advertising efficiency.
AI-driven feed recommendations have increased the time users spend on Facebook by 8% and on Instagram by 6% in 2024. Meanwhile, Threads, Meta’s text-based social media platform, has experienced explosive growth, reaching nearly 275 million monthly active users with daily signups exceeding one million.
This success is underpinned by a thriving global digital advertising market, which is projected to grow 9% annually to $1.5 trillion by 2030. CEO Mark Zuckerberg’s emphasis on embedding AI into ad targeting and content recommendations further solidifies Meta’s competitive advantage in this space.
In parallel, Meta is reportedly planning significant infrastructure investments to support its expansion. One such initiative includes a proposed $10 billion subsea fiber-optic cable project spanning 40,000 kilometers aimed at enhancing data flow across its platforms.
This ambitious project not only seeks to improve performance but also acts as a safeguard against potential disruptions caused by geopolitical tensions affecting traditional data routes.
Navigating regulatory and geopolitical challenges
As the U.S. political landscape shifts, Meta is recalibrating its approach to regulation and policy.
Sir Nick Clegg, Meta’s president of global affairs, recently highlighted Zuckerberg’s ambition to play an “active role” in shaping tech policy, particularly in areas like artificial intelligence.
This rapprochement marks a significant shift in the relationship between Trump and Zuckerberg, who had previously been at odds. Meta notably banned Trump from its platforms following the January 6, 2021, Capitol riots, citing his role in inciting political violence.
The ban has since been lifted, and the company has acknowledged that its content moderation policies during the pandemic were sometimes “too heavy-handed.”
Analysts see further upside
Despite its impressive gains, Meta’s valuation remains compelling. With a forward price-to-earnings (P/E) ratio of 25.3x, according to StockAnalysis, the stock still suggests room for further upside.
Wall Street analysts echo this optimism, maintaining a “Strong Buy” rating and setting a consensus price target of $662.62, implying an additional 8% potential increase.
As Meta’s investments in AI continue to drive growth, its infrastructure projects expand global reach, and its recalibrated political strategy aligns with the incoming U.S. administration, the company appears well-positioned to sustain its upward trajectory and deliver enduring value to shareholders.
Featured image via Shutterstock
