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Meta Platforms, Inc. (META), headquartered in Menlo Park, California, formerly Facebook, is renowned as the world’s largest social media company with apps like Facebook, Messenger, Instagram, and WhatsApp. Valued at $1.21 trillion by market cap, the company also provides augmented and virtual reality-related products comprising consumer hardware, software, and content, helping people to move from 2D screens toward immersive experiences.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and META definitely fits that description. The company is the sixth most valuable publicly traded company in the Nasdaq Composite after Microsoft (MSFT), NVIDIA Corporation (NVDA), Apple Inc. (AAPL), Alphabet Inc. (GOOGL), and Amazon.com, Inc. (AMZN).
However, the tech conglomerate has fallen 6.9% from its 52-week high of $531.49, which it hit on Apr. 8. Shares of META are up 1% over the past three months, underperforming the broader Nasdaq Composite’s ($NASX) 7.8% gains over the same time frame.
Longer term, META shares rose 82.4% over the past year, and in 2024, the stock is up 39.9%. By contrast, the NASX is up 14.5% on a YTD basis and 29.9% over the past 52 weeks.
To confirm the bullish price trend, META has been trading above its 50-day moving average since early June and above its 200-day moving average over the past year.
On Apr. 25, META shares fell 13% after the company’s second-quarter guidance disappointed analysts and investors. The company’s Q1 results beat analyst estimates. Its revenue and EPS came in at $36.46 billion and $4.71, surpassing Wall Street estimates of $36.16 billion and $4.32, respectively. META’s second-quarter sales guidance is between $36.50 billion and $39 billion, falling short of the consensus estimate of $38.30 billion. It also expects capital expenditure between $35 billion and $40 billion, higher than the previous forecast of between $30 billion and $37 billion.
META’s overall outperformance can be attributed to its advances in generative AI. In the previous quarter, META launched its Llama 3 large language model-based AI assistant, Meta AI, and has integrated AI chatbot capabilities into the apps in its portfolio, helping users perform queries. The company is also increasing its investments in AI product development and the construction of data center architecture.
To emphasize the stock’s outperformance, rival Alphabet has underperformed META. Alphabet has gained 39.2% in the past 52 weeks and is up 25.6% on a YTD basis.
Despite its recent underperformance compared to NASX, analysts are optimistic about META’s prospects. The stock has a consensus rating of “Strong Buy” from the 46 analysts covering it, and the mean price target of $520.05 is a 5% premium to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
