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 $1.4 trillion, Meta is also involved in advertisements, augmented, and virtual reality.
Companies worth $200 billion or more are generally described as “mega-cap stocks,” and META definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the internet content & information industry. The social media giant operates the world’s largest social media platforms, driven by AI-recommended content.
Despite its notable strength, Meta slipped 4.7% from its 52-week high of $602.95, achieved on Oct. 7. Over the past three months, META stock gained 10.8%, underperforming the Communication Services Select Sector SPDR ETF Fund’s (XLC) 13.4% gains during the same time frame.
In the longer term, shares of Meta rose 62.3% on a YTD basis and climbed 72.9% over the past 52 weeks, outperforming XLC’s YTD gains of 35.4% and 40.2% returns over the last year.
To confirm the bullish trend, Meta has traded above its 200-day moving average over the past year. However, it has been trading below its 50-day moving average since mid-November.
Meta's strong performance is driven by growing user engagement, AI-powered innovations, and increasing advertising demand. The company's social media platforms have over 3.2 billion daily users, fueling ad growth. Meta's AI efforts, including its Llama large language model, are gaining traction, with potential applications in AR/VR and government agencies. New features, such as enhanced video capabilities and user safety tools, also contributed to Meta's momentum.
On Oct. 30, META shares closed down marginally after reporting its Q3 results. Its EPS of $6.03 beat Wall Street expectations of $5.19. The company’s revenue was $40.6 billion, exceeding Wall Street forecasts of $40.2 billion. For Q4, META expects revenue in the range of $45 billion to $48 billion.
Meta’s rival, Alphabet Inc. (GOOGL) shares lagged behind the stock, with a 21% uptick on a YTD basis and a 25.2% gain over the past 52 weeks.
Wall Street analysts are bullish on Meta’s prospects. The stock has a consensus “Strong Buy” rating from the 51 analysts covering it, and the mean price target of $651.34 suggests a potential upside of 13.4% from current price levels.
