Meta Platforms, Inc., known as Meta and previously called Facebook, Inc., and TheFacebook, Inc., The American multinational tech conglomerate headquarters in Menlo Park, California.
Meta owns popular platforms like Facebook, Instagram, Threads, and WhatsApp and other services. It also operates the ‘Reality Labs,’ which includes its virtual, augmented, and mixed reality-related consumer hardware, software, and content. Meta is one of the largest American tech companies, part of the other “Big Five” alongside Alphabet (Google), Amazon,
Apple, and Microsoft. The company was ranked #31 on the Forbes Global 2000 list in 2023. In 2022, Meta had the third-highest research and development spending globally, investing $35.3 billion in R&D expenditure.
Meta has also acquired Oculus (now part of Reality Labs), Mapillary, CTRL-Labs, and a 9.99% stake in Jio Platforms. The company has ventured into non-VR hardware, including the now-discontinued Meta Portal smart displays and collaborates with Luxottica on the Ray-Ban Stories line of smart glasses.
On October 28, 2021, Facebook, Inc. rebranded to Meta Platforms, Inc. to “reflect its focus on building the metaverse”, an integrated digital environment that links the company’s products and services.
Meta stock outpaces market on AI growth.
Meta has greatly outperformed the broader market over the past year. The stock has gained 77.9%, compared to the broader S&P 500 Index’s ($SPX) 35.5% increase. In 2024, Meta stock is up 65.2%, exceeding the SPX’s 25.5% rise on a YTD basis.
Meta’s outperformance is somewhat less pronounced than the Vanguard Communication Services Index Fund ETF (VOX), which has risen 42.1% over the past year. However, Meta still leads year-to-date, surpassing the ETF’s 32.1% returns in the same period.
Meta drives this strong performance through its investments in AI, including Meta AI, Llama adoption, and AI-powered smart glasses.
The rollout of new video features, including Instagram Reels, has been positively received. With over 3.2 billion daily users on its social media apps, Meta Platforms continues to drive advertising demand. The company’s focus on AI to enhance engagement has increased user activity across platforms. New features, such as Teen Accounts and Matchmaker on Facebook Dating, also contribute to a safer experience.
The rollout of Meta AI and upcoming innovations, including Llama 4 and partnerships to make Llama available in U.S, are expected to strengthen Meta’s position in the market. The company is seeing rapid adoption of its Meta AI and Llama technologies, now widely recognised across the industry.
Meta also reached important milestones in Reality Labs, integrating AI with wearables, including high demand for Ray-Ban Meta glasses. The launch of its first fully holographic AR glasses, Orion, and the release of its latest Quest 3S.
After Q3 results on October 30, Meta’s earnings per share of $6.03 beat Wall Street’s estimate of $5.19, with revenue of $40.6 billion exceeding projections of $40.2 billion.
Looking ahead to Q4, the company anticipates revenue between $45 billion and $48 billion. Analysts expect Meta’s EPS to grow by 51.5% to $22.53 for the current fiscal year, continuing its trend of exceeding earnings expectations over the last four quarters.
Meta stock updates: Threads ads launch and antitrust trial
Meta Platforms has seen significant developments recently. Early next year, Meta plans to introduce ads on Threads. Meanwhile, the FTC (Federal Trade Commission) is preparing to challenge Meta in an antitrust trial over its acquisition of Instagram and WhatsApp, with the date for the trial not yet finalised.
Meta’s Threads to introduce ads
Meta’s text messaging platform Threads will start showing ads in early 2025, according to a report from The Information. A small team from Instagram’s ad division unit is preparing the ads. Allowing only a few marketers to publish ads on Threads in January.
Currently without any monetisation features, Threads could become a good source of revenue generation in the future. Meta also keeps adding new features to Threads to attract more users, reaching 275 million active users as of October. Launched in July last year as a direct competitor to Elon Musk’s X (formerly Twitter), Threads has successfully drawn users from X, and it might also attract advertisers concerned about harmful content on X.
However, with Musk’s close ties to President-elect Trump and his possible appointment as the head of the new “Department of Government Efficiency,” there could be changes for his companies, including X.
Meta to face trial in FTC Antitrust case over Instagram and WhatsApp
Meta Platforms is scheduled to face trial in a U.S. FTC antitrust lawsuit, after previously attempting to avoid it in a 2020 case. The FTC alleges that Meta unlawfully thwarted competition in the social media space by overpaying for and acquiring Instagram in 2012 and WhatsApp in 2014.
The FTC has called for the break-up of Meta Platforms Family of Apps (FoA), citing its monopolistic position in the industry. The judge also ruled that Meta cannot argue the acquisitions enhanced its competitive position against Apple and Google’s parent company, Alphabet.
From the beginning, Meta has maintained that the lawsuit overlooks the existing competition from TikTok, YouTube, X, and Microsoft’s LinkedIn. Despite this, Meta remains confident that it can prove the acquisitions have strengthened competition instead of harming it and have also been beneficial for consumers.
Is Meta a good stock to buy?
Wall Street is very bullish on Meta stock. On TipRanks, Meta stock holds a Strong Buy consensus rating based on 41 Buys, three Holds, and one Sell rating. The average price target for Meta Platforms is $661.55, indicating a potential upside of 14.1% from its current value. So far this year, Meta stock has risen by 64.4%.
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