It’s been a tough week for investors in Meta Platforms. Facebook’s owner saw META share price plunge 12% after announcing higher-than-expected spending on artificial intelligence.
Chief executive Mark Zuckerberg revealed that the company’s plan was to invest significantly to build even more AI models over the coming years.
But the news gave anxious investors the jitters and saw almost $200 billion wiped off its value as the stock’s terrific run in 2024 came to a shuddering half.
Meta Platforms (META) Stock Year-To-Date Performance. Source: TradingView
Here in our Meta stock forecast, we take a look at the company’s plans, analyze how it’s performed over the past 12 months, and reveal the latest META stock predictions of analysts.
Key Takeaways
- The META stock price slumps 12% on plans for AI spending.
- Revenue soared 27% to $36.4 billion in the first quarter.
- CEO Mark Zuckerberg wants to invest significantly in AI.
- Analysts are concerned Meta isn’t disciplined enough with spending.
- Show Full Guide
Summary of the Latest META Stock Predictions
| Meta Stock Forecast (as of April 26, 2024) |
1-Year Forecast | 2025 (December) | 5-Year Forecast to April 2029 |
| MarketBeat | $509.18 | – | – |
| WalletInvestor | $517.58 | $532.54 | $612.51 |
| TipRanks | $547.45 | – | – |
Meta Platforms (META) Stock Analysis
Let’s start our Meta stock forecast 2024 by looking at how the company has performed over the past year.
No one can deny that Meta has been one of the stand-out performers over the past year as the world continues to recognize the growing importance of AI.
Even taking this week’s dip into account, the META stock price has still risen 110% from $209.40 to $441.38 in the 12 months to the close on April 25, 2024.
Meta Platforms (META) Stock 1-Year Performance. Source: TradingView
It has even increased by 27.5% from the $346.29 level at the start of this year, while the stock price has been 130% up over the past five years.
The company has come a long way since launching as Facebook back in 2024. Its stable of apps now includes Messenger, Instagram and WhatsApp.
In fact, it’s now the seventh largest company in the world with a $1.12 trillion valuation, according to CompaniesMarketCap as of April 2024.
Meta’s First Quarter Results
Meta announced first-quarter revenue for 2024 came in at $36.4 billion, which was a 27% increase over the $28.6 billion figure for the corresponding period last year.
It also revealed net income was up 117% to $12.4 billion, while there was a 114% increase in the diluted earnings per share (EPS).
In a statement, Mark Zuckerberg said the company had seen “healthy growth” across all its apps while steady progress was being made in building the metaverse.
“It’s been a good start to the year. The new version of Meta AI with Llama 3 is another step towards building the world’s leading AI.”
In a subsequent earnings call, Zuckerberg revealed that more than 3.2 billion people used at least one of the company’s apps every day.
Meta’s First Quarter 2024 Financial Highlights
| Three Months Ended March 31 | % Change | ||
| In millions, except percentages and per share amounts | 2024 | 2023 | |
| Revenue | $36,455 | $28,645 | 27 % |
| Costs and expenses | $22,637 | $21,418 | 6 % |
| Income from operations | 13,818 | $7,227 | 91 % |
| Operating margin | 38% | 25% | |
| Provision for income taxes | $1,814 | $1,598 | 14 % |
| Effective tax rate | 13 % | 22 % | |
| Net income | $12,369 | $5,709 | 117 % |
| Diluted earnings per share (EPS) | $4.71 | $2.20 | 114 % |
Source: Meta
Outlook for the Second Quarter: Higher Costs on the Way
The company expects second-quarter total revenue to be in the range of $36.5 billion to $39 billion, according to its results announcement.
However, full-year 2024 total expenses are now predicted to be between $96 billion to $99 billion, up from $94 billion to $99 billion. This is due to higher infrastructure and legal costs.
“For Reality Labs, we continue to expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts and our investments to further scale our ecosystem,” it stated.
In addition, full-year 2024 capital expenditures will be in the range of $35 to $40 billion, which is an increase over the previous $30 to $37 billion range due to infrastructure investments.
“While we are not providing guidance for years beyond 2024, we expect capital expenditures will continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts,” it added.
Latest META News: AI Investment Plans
The big Meta news has been Zuckerberg’s unwavering commitment to developing Meta’s AI capabilities.
In the earnings call, he highlighted how the company was building a number of different AI services, including those for personal and business users.
“Last week we had the major release of our new version of Meta AI that is now powered by our latest model, Llama 3,” he said. “Our goal with Meta AI is to build the world’s leading AI service both in quality and usage.”
Zuckerberg also noted that the initial rollout of Meta AI, the virtual assistant that can be asked questions across its apps and glasses, was going well.
“Tens of millions of people have already tried it,” he said. “The feedback is very positive…We’ve started launching Meta AI in some English-speaking countries, and we’ll roll out in more languages and countries over the coming months.”
Meta Has the Talent Needed
Zuckerberg also insisted that Meta has the “talent, data, and ability” to scale infrastructure to build cutting-edge AI models and services.
“This leads me to believe we should invest significantly more over the coming years to build even more advanced models and the largest scale AI services in the world,” he said.
However, he warned that building leading AI would be a “larger undertaking” than other experiences and was likely to take several years.
“On the upside, once our new AI services reach scale, we have a strong track record of monetizing them effectively,” he added. “There are several ways to build a massive business here, including scaling business messaging, introducing ads or paid content into AI interactions, and enabling people to pay to use bigger AI models and access more compute.”
Meta Platforms Stock Forecast: What Do Analysts Think?
So, what are the Meta stock predictions of analysts?
According to Susannah Streeter, head of money and markets at Hargreaves Lansdown, investors are questioning the company’s approach.
She told Techopedia:
“There is uneasiness about the risk that Meta is being distracted from its core digital advertising activities with its big foray into AI. Spending needs to have a razor-sharp focus and have a clear strategic aim.”
While AI can’t be ignored and Meta has deep pockets, Streeter pointed out that investors aren’t tolerating money being thrown at projects without a clear path to steady revenue streams.
“There is a concern that Meta isn’t being disciplined enough in its spending activities and needs to concentrate more on defending its market share of digital advertising,” she said.
However, she acknowledged that if it’s well targeted, then substantial investment into AI should help improve engagement on its platforms and the amounts spent on ad space.
“Regulation still is the big risk ahead,” she added. “Signs of the Biden administration’s desire to limit the power of big tech are intensifying.’’
Danni Hewson, head of financial analysis at AJ Bell, also highlighted a disconnect between the company’s senior management and the stock market. She told Techopedia:
“Investor confidence in Meta took a beating as Zuckerberg poured billions into the mythical metaverse that hardly anybody seemed to understand, and no one really thought would lead to big profits.”
Hewson pointed out that no one balked when Microsoft announced it was plowing billions more into AI but that Meta has “past sins to deal with,” which makes investors nervous.
“Without that old baggage Meta’s latest set of results should have been crowd-pleasers and the business seems to have come of age in more ways than one,” she added. “It knows advertising and it knows how to use the eyeballs on its sites to best advantage, so putting more of what they don’t know they already want can only be a good thing.”
The big X-factor for Meta, as for many tech companies, are the sharp teeth regulators have found behind their welcoming smiles.
“Governments want big tech, but they’re also nervous of the clout it now wields,” she added.
Michael Hodel, director of Morningstar, has a fair value estimate of $400 on the stock.
In his Meta Platforms stock forecast, he referenced Zuckerberg’s belief that there are multiple avenues to monetize investments in AI but questioned its prospects. He wrote:
“Meta’s track record of building products outside its core business isn’t great, and it will face several competitors outside of social media and advertising.”
He also believes Meta will “ratchet back spending” if revenue opportunities don’t materialize.
“We believe it is too early to assume AI delivers meaningful revenue outside of the improvements it enables within the core advertising business,” he stated.
META Stock Predictions 2024, 2025 & Beyond: Where Will the Price Go?
The next stage of our Meta stock forecast is looking at the outlook for the META stock price. So, is META a buy, hold, or sell?
The stock is rated as a ‘Moderate Buy,’ according to the views of 44 Wall Street analysts compiled by MarketBeat. However, opinions are divided.
While 38 have it down as a ‘Buy’ and two as a ‘Strong Buy,’ there are also three ‘Hold’ recommendations in place and one ‘Sell.’
The consensus Meta share price forecast is that it could rise 15.36% over the coming year to $509.18 from its $441.38 closing price on April 25, 2024.
| Date | Analyst Firm | Action | Rating Change | Price Target | Percentage Change |
| 4/25/2024 | Citigroup | Lower Target | Buy ➝ Buy | $590.00 ➝ $550.00 | +24.61% |
| 4/25/2024 | Truist Financial | Lower Target | Buy ➝ Buy | $550.00 ➝ $535.00 | +21.40% |
| 4/25/2024 | TD Cowen | Lower Target | Buy ➝ Buy | $590.00 ➝ $530.00 | +20.26% |
| 4/25/2024 | Guggenheim | Lower Target | Buy ➝ Buy | $520.00 ➝ $500.00 | +13.46% |
| 4/25/2024 | Barclays | Lower Target | Overweight ➝ Overweight | $550.00 ➝ $520.00 | +17.99% |
| 4/25/2024 | Royal Bank of Canada | Lower Target | Outperform ➝ Outperform | $600.00 ➝ $570.00 | +29.99% |
| 4/25/2024 | Sanford C. Bernstein | Lower Target | Outperform ➝ Outperform | $590.00 ➝ $565.00 | +28.85% |
| 4/25/2024 | Deutsche Bank Aktiengesellschaft | Lower Target | Buy ➝ Buy | $540.00 ➝ $500.00 | +14.03% |
| 4/25/2024 | Raymond James | Lower Target | Strong-Buy ➝ Strong-Buy | $550.00 ➝ $525.00 | +21.49% |
| 4/25/2024 | UBS Group | Lower Target | Buy ➝ Buy | $610.00 ➝ $575.00 | +33.81% |
| 4/25/2024 | Roth Mkm | Boost Target | Buy ➝ Buy | $500.00 ➝ $510.00 | +18.69% |
Source: MarketBeat as of April 26, 2024
Elsewhere, the Meta stock forecast of TipRanks has the stock as a ‘Strong Buy,’ based on the views it’s collated from 43 Wall Street analysts as of April 26, 2024.
Their consensus view is also more optimistic, with the possibility of a 24% upside to $547.45 over the next 12 months.
The algorithmic Meta stock forecast 2025 of Wallet Investor, has the stock rising 17% to $517.58 over the coming year. It suggested the stock might climb even higher and close the year at $532.54.
Although a Meta stock forecast 2030 is too far into the future, the site’s five-year forecast has the stock hitting $612.51.
Note that analysts and algorithm-based predictions might prove to be wrong.
The Bottom Line: Should I Invest in Meta?
So, what is the conclusion of our long-term Meta stock forecast? Well, Meta is certainly one of the world’s largest companies and appears to be fully committed to being a leader in the growing world of artificial intelligence.
However, this is a new area for everyone and is likely to require billions of pounds in investment over the next few years. This fact is already making investors nervous, as we saw with their response to the company’s recent quarterly results.
Only time will tell whether this focus on AI is a wise move, and investors are likely to endure some volatility along the way.
Do your own research and always remember your investment decision depends on your attitude to risk, your expertise in the stock market, the spread of your portfolio, and how comfortable you feel about losing money.
The information in this article does not constitute investment advice and is meant for informational purposes only.
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References
- Largest Companies by Market Cap (Companiesmarketcap)
- Meta – Meta Reports First Quarter 2024 Results (Investor.fb)
- Meta Platforms, Inc. (META) First Quarter 2024 Results Conference Call April 24th, 2024 (S21.q4cdn)
- Meta Platforms (META) Stock Forecast & Price Target (Marketbeat)
- Meta Platforms (META) Stock Forecast, Price Targets and Analysts Predictions – TipRanks.com (Tipranks)
- Meta Platforms Stock Forecast, “META” Share Price Prediction Charts (Walletinvestor)
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