Publication date: March 20, 2024

You probably know Meta Platforms, Inc. from the extremely popular platforms Facebook, Instagram, WhatsApp, and Messenger and its well-known CEO Mark Zuckerberg.

Meta has shown exceptionally positive share price performance over the past two-plus years. For the past six weeks, the stock has been engaged in a healthy and robust correction within a strong uptrend. The current decline offers investors opportunities to build a long-term position in this company. Time for a closer look at Meta Platforms, in this article we are going to analyze where the investment opportunities lie and what the price potential is.






Below is Meta's price chart for the period November 2022 to the present, to get a clear picture of that exceptionally good period. The purple line is the Nasdaq.

With a price gain of over 500% in just over two years, Meta more than beats the excellent-performing Nasdaq (+80%).

Meta Platforms

In addition to its well-known social and messaging platforms, Meta is investing in virtual and augmented reality through its Reality Labs division with products such as the Meta Quest VR headsets and the development of the Metaverse, a 3D digital world where people can work, play games and socialize.

META's revenue model revolves primarily around advertising, offering personalized ads based on user data. It also generates revenue through VR hardware and subscriptions.

Meta employs about 74,000 people, but the company aims to reduce it to about 70,500 employees by 2025. In 2024, they had combined revenues of $164.5 billion, up 22% from the previous year. Net profit was $62.4 billion, up 59% from 2023. The U.S. is the largest market, accounting for about 45% of total sales. Europe accounts for about 25%. Major markets in Europe include the U.K., Germany, France, the Netherlands, Italy and Spain. Strict privacy regulations (such as the GDPR) affect ad revenue in this region. The remaining 30% comes from the rest of the world. Major growth markets: India, Indonesia, Japan, South Korea, and Australia. India is Meta's largest user market but generates less revenue per user than the U.S. or Europe.

What is the current situation at Meta?

Artificial Intelligence (AI):_Meta has significantly increased its investment in AI, with capital spending estimated at $60 billion to $65 billion by 2025, primarily focused on developing AI infrastructure and capabilities.

Virtual and Augmented Reality: Since acquiring Oculus in 2014, Meta has invested more than $80 billion in VR and AR. These investments are expected to exceed $100 billion by the end of 2025. The Reality Labs division generated revenues of $2.1 billion in 2024, with a loss of $17.7 billion.

During the release of fourth-quarter and full-year 2024 figures on Jan. 29, Meta gave a revenue forecast for the first quarter of 2025 between $39.5 billion and $41.8 billion, which would represent 8-15% year-on-year growth.

The U.S. remains by far the largest revenue market for Meta. Europe has a strong position, but privacy regulations pose a challenge. Asia-Pacific is growing rapidly, but the average revenue per user (ARPU) is lower. Emerging markets (such as Africa and South America) contribute relatively little revenue, despite a large user base.

What is the outlook for Meta?

Here opinions vary; fundamental analysts are mostly positive and set an average price target of around $750. Technical analysts are mostly negative for the short term.

Our analysis shows that the company has a strong financial performance, with significant revenue and earnings growth through 2024. The company continues to strategically invest in AI and the metaverse, indicating a focus on future growth and innovation. Despite challenges in the VR market, Meta's core online advertising business remains highly profitable. We are positive for the long term.

For the short term, we are anything but. Our mathematical analysis system expects a larger correction after the huge rise. This is a correction in a long upward trend.

Below is Meta's price chart from mid-2022 with the most likely scenario plotted. The price is expected to be around $540. The recovery that follows could go as far as $620-$640. From that zone, Meta's share price is expected to complete the larger correction through a decline into the $450-$390 zone. From there, the uptrend can continue to the price target at $850.

Conclusion:

Meta has shown tremendous potential. We are not immediately excited about investing in RealityLabs with projects like Metaverse. The current share price is hovering around $580 and has a long-term price target tentatively at $850.

After the long uptrend from November 2022 to February 2025 from $90 to $725, the stock price is in the middle of the larger correction. From the $450 level, it is worth considering taking the stock into the portfolio. The price can then theoretically continue to $390 but from there the correction does end and the price can continue its ascent.

Speculative investors with less patience can capitalize on the support of $540 for the expected recovery to around $625. Note; this is only to be considered for speculative investors.

As currently scheduled, Meta is expected to announce its first-quarter 2025 results on April 22, 2025.

Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.