Meta Platforms Stock Is Rising Again: Here’s Why It’s a Buy The Motley Fool

Still, the big surprise was Meta’s announced update of its Ray-Ban smart glasses, built in partnership with EssilorLuxottica (ESLOY). If inflation continues to persist at elevated levels, the Federal Reserve will continue to raise the federal funds rate. And investors have been concerned that aggressive moves by the Fed to push down inflation could end up severely hurting the economy. © 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer.

• Insider Intelligence estimates that Meta properties account for 42% of total time spent on social media by U.S. adults, but the company soaks up an estimated 75% of social media ad dollars.
• Reels currently monetizes at a slower pace than older and more established products like the news feed and Stories.
• The value of shares and ETFs bought through a share dealing account can fall as well as rise, which could mean getting back less than you originally put in.
• The company quickly grew and expanded into other universities and then opened itself to the public in 2006.
• Meta looks like a company in a transition period; its social media networks aren’t delivering the type of growth that investors might have come to expect.

That can be harder to discern from a billboard, radio, or newspaper placement. A big part of Meta’s turnaround story involves overcoming the industry upheaval caused by Apple’s privacy change. Starting with the iOS 14.5 update in the spring of 2021, Apple began requiring apps downloaded through the App Store to let users opt in or out of tracking their activity across third-party sites.

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On the other hand, some investors are worried about the resources in time and capital that Meta Platforms could allocate to the project with uncertain outcomes. Nevertheless, the company’s core social media business is experiencing robust user and revenue growth at a massive scale. Let’s try to grasp Meta Platforms’ business better Best macd settings for day trading and determine whether it’s a buy, sell, or hold for 2022. The real excitement hasn’t focused primarily on the newest flashy tech. Wall Street is mainly fired up because the Menlo Park, Calif.-based social media giant has restored confidence in its digital advertising prowess and revenue growth appears to be back in high gear.

That could very well signal that Meta’s advertising business, which makes up the vast majority of its revenue, reached a nadir in the fourth quarter as well. Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers. Meta is clearly facing headwinds and it will be a challenge to overcome them, but the relative bargain valuation suggests these headwinds are already priced into the stock. That makes the potential reward Meta can generate going forward worth the risk.

• As of 2022, the company claimed more than 2.9 billion monthly active Facebook users.
• The Meta Quest 3 starts at $499.99 compared to the Vision Pro at $3,500.
• According to estimates from MarketBeat, as of 2 November 2022, the analysts set an average META stock price target at $170.93 a share.
• Our investment strategies, which we call “Investment Kits,” help investors manage risk and maximize returns by utilizing AI to identify trends and predict changes in the market.
• That could mean right now is the time for interested investors to buy in at a discount.

The average analyst rating for Meta Platforms stock from 46 stock analysts is “Strong Buy”. This means that analysts believe this stock is likely to perform very well in the near future and significantly outperform the market. Meta’s rise today, auto forex trader while certainly good news for shareholders, should also be viewed cautiously. Investors are still processing a lot of information about inflation and a potential recession, which is likely to keep the market volatile over the short term.

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In the U.S., 202 million people used Facebook on a daily basis, up from 200 million in Q1. Beyond virtual reality, the Quest 3 also lets users “interact with virtual content and the physical world simultaneously,” offering a “mixed reality” experience. That could mean playing a virtual game on your kitchen table or visualizing virtual art on your living room walls. Meta said its Quest 3 virtual-reality headset, which  is 40% thinner than its predecessor, will go on sale on Oct. 10.

Finally, rising competition from ByteDance’s Tiktok and other social media sites is slowing user growth and engagement. Those worries, in part, have resulted in Meta’s share price plummeting 50% over the past 12 months. But shares are rebounding today as some investors appear to be coming back to the technology sector. 52 Wall Street research analysts have issued “buy,” “hold,” and “sell” ratings for Meta Platforms in the last year. There are currently 2 sell ratings, 5 hold ratings, 44 buy ratings and 1 strong buy rating for the stock. The consensus among Wall Street research analysts is that investors should “moderate buy” META shares.

Where will Meta Platforms stock be in five years?

Upgrade to MarketBeat All Access to add more stocks to your watchlist. Investors will need to consider all of the risks and advantages before they start buying shares. Meta opened on January 5th down roughly 2% amidst news of yet another $414 million fine handed down for violating European Union law. Another reason could be reports of layoffs at TikTok owner ByteDance. TikTok is a rising power in the world of social media, so any bad news for TikTok is good news for companies like Meta and Twitter. Part of it may be the realization of the savings CEO Mark Zuckerberg was looking for when Meta announced layoffs in November.

EPS Growth

Zuckerberg said he expects to roll out the technology over the next few years. It won’t be broadly accessible until the avatars can be produced with a two- or three-minute scan by your cell phone. Mark Zuckerberg’s decision to rename his company Meta Platforms will go down as one of the silliest ideas in American corporate history, right up there with New Coke and the Ford Edsel. Please log in to your account or sign up in order to add this asset to your watchlist.

A tech stock rebound is fueling Meta’s jump.

To put that figure into context, Meta’s revenue in 2021 was $118 billion (about 15.5%). Interestingly, marketers are increasing their spending on digital channels. Since folks spend more time on their phones, connected TVs, and laptops, marketers are moving their spending to where consumers are.

At the time, the company said it expects year-over-year losses to rise in 2023 and to grow “meaningfully” again in 2024. The new version will be able to livestream video to Facebook or Instagram from the perspective of the wearer. The glasses will also come with an AI assistant that can answer questions on the fly. But that capability will become much more interesting next year when Zuckerberg said a free software update will enable the AI assistant to see what you’re seeing. The Quest 3 will compete with Apple’s (AAPL) Vision Pro, set for release in early 2024, though at a much lower price point. Meta stock has rallied 149% so far in 2023 through Friday’s close, second only to Nvidia (NVDA) in the S&P 500.

The company has highlighted that it will be investing aggressively to become a leader in the metaverse. Meta alluded to some of these headwinds when it told investors that it expected a 7% growth in revenue for 2022. That would be the lowest rate of growth in the last decade and the first below double digits. Be sure to read IBD’s The Big Picture every day to stay in sync with the market direction and what it means for your trading decisions. Meanwhile, an important part of the Meta growth story is the ongoing shift to digital advertising.

The company began to feel its impact in its 2021 Q3, but management revealed the full scope of its effect in Q4. “Multi-year AI driven platform retention could help multiple expansion, as terminal value uncertainty has weighed on valuation.” Reels currently monetizes at a slower pace than older and more established products like the news feed and Stories. According to Citi, the total addressable market for the metaverse could be $8trn-$13trn by 2030, while the number of users could rise to five billion, or 65% of the global population. The time could finally be right for Meta to capitalize on some of these new markets, and the stock looks affordable even without an impact from products like the Quest 3. BofA Securities said the event provided an initial glimpse into Meta’s strategy for leveraging AI to enhance user engagement through chat, image creation, and introducing new business services.

“With better monetization, additional room for cost efficiency, and increased scrutiny of TikTok, we continue to like the setup for FY23,” wrote the analysts, who recommend buying the stock. For the most part, investors have been jumping on Meta’s cost-cutting what is eos crypto story and two rounds of job reductions, which began in November and are continuing in the first half 2023. In February, CEO Mark Zuckerberg said this would be the company’s “year of efficiency,” a declaration that sent the stock up over 20%.

Generative AI operating costs are much higher than regular search. Shares of META are up more than 100% over the last year, and the stock has captured the attention of retail investors, frequently appearing on the Yahoo! Finance trending tickers list. Analysts and investors are buzzing about the company’s upcoming Meta Connect 2023 event on Sept. 27 and Sept. 28. The event will be held virtually and focused on AI and virtual, mixed and augmented realities.