Meta Platforms stock is surging, building off the Facebook parent company's triple-digit gains in 2023. With the company's deep slump in 2022 firmly in the rearview mirror, analysts are closely watching the growth of Meta's ad business and its spending on AI. A big test comes this week with the company's third quarter results due late Wednesday.
Meta rejoined the ranks of trillion-dollar market cap tech companies at the start of the year and is among the world's most valuable companies. Meta stock is still highly rated among Wall Street analysts. But there are challenges ahead for the tech giant to build on its growth, including providing a return on Chief Executive Mark Zuckerberg's big bets on the metaverse and AI.
So is Meta stock a buy? Read below for the latest chart analysis for Meta stock as well as company news and ratings from Wall Street analysts.
Meta Stock: Looking To Retake 21-Day Moving Average
Meta stock opened trading Monday a fraction higher, trading near 577. Shares are up from a Sept. 19 breakout from a 542.81 consolidation pattern buy point, according to MarketSurge.
The stock, which is trading near 578, is out of the 5% buy zone from the entry.
A 3.5% fall on Oct. 23 pushed shares below Meta's 21-day exponential moving average. But three consecutive trading days of small gains has Meta nearly retaking the short-term support level.
Meanwhile, Meta's Relative Strength line remains above 90 out of a best-possible 99, a sign of continuing bullishness compared to the rest of the market.
Meta stock shows a 97 out of a best-possible 99 IBD Composite Rating, according to the IBD Stock Checkup tool. It is the top-rated stock in the Internet Content group tracked by IBD.
Meta Q3 Earnings On Wednesday
The next big test for Meta stock comes Wednesday. Meta will publish its third quarter results after the market closes Oct. 30. Analysts polled by FactSet project Meta will post a 19% increase in earnings, to $5.21 per share. Sales are seen rising 17.7% to $40.2 billion.
Following Meta's Q2 report in late July, the stock jumped 5%. Before that, shares tumbled 10.5% in trading following Meta's first quarter report as investors worried over Meta's AI spending plans.
New Street Research analyst Dan Salmon noted that Meta stock is up 20% since its reported Q2 results in late July, though it has a "slightly better setup" after pulling back from an all-time high near 600 in recent trading days.
"The Street seems back into a mood of 'trust in Zuck' to deliver, helped by an improving economic outlook," Salmon wrote to clients Friday.
For a positive response, Salmon said Meta likely needs to third quarter revenue at the high-end of its guidance and above 20% year-over-year growth. Sales guidance for the fourth quarter, meanwhile, will likely need to imply "high double digit revenue growth," Salmon added.
Salmon rates Meta stock a buy with a price target of 595.
Majority Of Meta Stock Analysts Say Buy
Founded as Facebook and renamed Meta Platforms in 2021, the company boasts 3 billion regular users across its Family of Apps, which includes Facebook, Instagram, WhatsApp and Threads.
That reach has enabled Meta to dominate the social media advertising market, and has made Meta stock a Wall Street favorite. In terms of valuation, only Apple, Nvidia , Microsoft , Amazon and Google-parent Alphabet boast larger market caps than Meta. Those stocks, along with Tesla, make up the so-called Magnificent Seven that powered the S&P 500's rally starting last year.
Even with a nearly 400% run since the start of 2023, analysts are bullish on further growth for Meta.
Of the 71 stock analysts following Meta, 85% have a buy rating, according to FactSet. Meta has nine neutral calls and two sell warnings among analysts.
The average target price for Meta stock by analysts is 612.46, according to FactSet, implying roughly 6% upside from Meta's price Monday.
For the full year, Meta's earnings are seen increasing 37% to $21.36 per share, while sales rise 20% to $161.8 billion, according to FactSet.
Debate About AI Spending, Metaverse
Analysts are generally bullish about Meta's ability to use AI to strengthen its hold on the digital advertising market. Meta's digital advertising prowess makes it massively profitable, reporting nearly $29 billion in operating income for the first six months of 2024.
Still, there are questions from investors on the big long-term bets Zuckerberg is making.
The first debate is how quickly Meta can see a return on the tens of billions it is investing in data centers to power its AI ambitions, among other AI costs.
At the same time, Meta is also spending tens of billions on developing products and software to power Zuckerberg's vision for the metaverse.
AI is a much more popular topic among investors. Wall Street is mostly skeptical of the metaverse idea — even after Zuckerberg's Orion smart glasses demo impressed.
Meta Market Cap
You can check for Meta's current stock price here. Meta's market cap was $1.5 trillion as of Oct. 28. Here is how the stock has grown over time:
| Time Period | Meta Stock % Gain | S&P 500 % Gain |
|---|---|---|
| 2024* | 63.7 | 22.7 |
| Previous 12 Months* | 95 | 42 |
| 2023 | 194.3 | 24 |
| 2022 | -64 | -19 |
| 2021 | 23 | 29 |
| Since IPO (May 18, 2012) | 1,411 | 332.5 |
* Prices as of Oct. 28
