Menlo Park, California-based Meta Platforms, Inc. (META) operates as a social technology company. The company develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables. With a market cap of $1.7 trillion, Meta is also involved in advertisements, augmented, and virtual reality.
Shares of this social media giant have outperformed the broader market considerably over the past year. META has gained 71.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 23.3%. In 2025, META stock is up 17.3%, surpassing the SPX’s 3.2% rise on a YTD basis.
Zooming in further, META’s outperformance looks less pronounced compared to the Vanguard Communication Services Index Fund ETF (VOX). The exchange-traded fund has gained about 32.1% over the past year. Moreover, META’s gains on a YTD basis outshine the ETF’s 7.1% returns over the same time frame.
META's recent success has been attributed to strong ad revenue growth and its emphasis on AI-driven initiatives for 2025. Despite concerns over its $65 billion AI spending plan, the company saw revenue surge, demonstrating the effectiveness of its AI-powered engagement and ad pricing strategies. Analysts have praised Meta for its ability to integrate AI into advertising, leading to a market value increase of over $80 billion. As competition in AI-driven cloud services and advertising heats up, Meta's continued investment in AI infrastructure is expected to drive future growth. Despite recent news surrounding DeepSeek, Meta remains committed to its aggressive spending plan and it is believed that efficiency gains from DeepSeek's technology will enhance the value of Meta's AI products, leading to a successful outcome in the long run.
On Jan. 29, META reported its Q4 results, and its shares closed up more than 1% in the following trading session. Its EPS of $8.02 surpassed Wall Street expectations of $6.68. The company’s revenue was $48.4 billion, exceeding Wall Street forecasts of $47 billion.
For fiscal 2025, ending in December, analysts expect META’s EPS to grow 6.7% to $25.45 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 53 analysts covering META stock, the consensus is a “Strong Buy.” That’s based on 44 “Strong Buy” ratings, two “Moderate Buys,” five “Holds,” and two “Strong Sells.”
The configuration has been fairly stable over the past three months.
On Jan. 30, Scotiabank analyst Nat Schindler kept a “Sector Perform” rating on META and raised the its price target to $627.
While META currently trades above its mean price target of $677.56, the Street-high price target of $811 suggests an upside potential of 18%.
