Meta Platforms (META) is Investing in These Five Major AI Opportunities

Stock (Symbol)

Meta Platforms (META)

Stock Price

$687

Sector

Data is as of

Expected to Report

Company Description

Meta Platforms Inc., formerly Facebook, Inc., builds technologies that help people find communities and grow businesses.

The Company’s products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) headsets, wearables, and in-home devices.

The Company operates through two segments: Family of Apps (FoA) and Reality Labs (RL).

FoA includes Facebook, Instagram, Messenger, WhatsApp, and other services.

RL includes augmented and virtual reality-related consumer hardware, software, and content.

Facebook enables people to connect, share, discover and communicate with each other on mobile devices and personal computers.

Instagram is a place where people can express themselves through photos, videos, and private messaging, and connect with and shop from their favorite businesses and creators.

Messenger is a messaging application for people to connect with friends, family, groups, and businesses across platforms and devices.

Sharek’s Take

Meta Platforms (META) CEO Mark Zuckerberg stated AI is transforming everything Meta does, and the company is continuing to increase its investments in AI with a focus on these five major opportunities:

• Improved Advertising: Meta’s goal is to make any business tell them what objective they’re trying to achieve. Using AI to automate targeting, generate creative, and maximize ROI for businesses. Last qtr, META already tested new ads recommendations model which has already increased conversion rates by 5% and saw 30% more advertisers using AI creative tools.
• More Engaging Experiences: Management stated this will come in two forms, better recommendations for existing content types and better new types of content. AI will enhance content recommendations and enable new interactive, AI-generated formats across Facebook, Instagram, and Threads.
• Business Messaging: Meta aims business messaging to be the next pillar of its business. Turning WhatsApp, Messenger and Instagram messaging into scalable sales and customer service tools using AI agents.
• Meta AI: Meta’s goal is to make Meta AI the leading personal AI with an emphasis on personalization, voice conversations, and entertainment. With AI, Meta is integrating Meta AI into Meta apps, with future monetization through ads and premium features.
• AI Devices: Meta is investing in hardware, especially smart glasses, as the next big AI platform. Last qtr, Ray-Ban Meta AI glasses have tripled in sales.

Each of these is a long-term investment that builds on Meta’s development of general intelligence and leading AI models and infrastructure. Management stated even with significant spending, the company doesn’t need every initiative to succeed in order to see a strong return. However, Zuckerberg concluded that if multiple areas do succeed, Meta believes the payoff will be exceptionally rewarding.

Meta Platforms, formerly Facebook, builds applications that enable people to connect and share with friends and family through mobile devices, personal computers, reality headsets, and in-home devices. The company has around 3.43 billion daily users within its Family of Apps. Management has been investing heavily in AI infrastructure, which has boosted ad performance.

Meta properties include:

• Facebook — a social network that allows people to view friends’ pictures and posts, as well as news and events. Almost half of the time spent on Facebook is watching videos.
• Messenger — a messaging app that lets people chat with friends, send photos, videos, and voice notes.
• Instagram — a photo and video sharing app that allows people to explore interests that are sometimes outside of their friends network. On Instagram, Reels was the largest contributor to engagement growth.
• WhatsApp — a secure messaging app that is used to text or video chat. WhatsApp makes it easy to compile a chosen set of friends for a group chat.
• Facebook Reality Labs — includes augmented and related hardware, software, and content. Facebook just launched Quest 3, an eye goggle device with two hand controllers for people to connect with virtual reality worlds. Quest 3 is 40maller than Quest 2.
• Threads — a text-based app for sharing updates and engaging in real-time conversations. It integrates with Instagram,, allowing users to easily follow and share with their Instagram connections.
• Meta AI — an assistant built into Meta apps that answers questions, creates images, and helps with tasks.

Meta’s stock has been on a wild ride for the past couple of years. The company “bet the farm” on developing a metaverse in 2022. Profits tanked, as did the stock. In 2023, management refocused on its core products and slashed expenses in a year of efficiency. Management cut headcount 22% during 2023 as profits got back on track. For 2024, the company repurchased $30 billion worth of shares as part of its capital return program. It also distributed dividends worth $5 billion. META is part of the Growth Portfolio and Aggressive Growth Portfolio.

One Year Chart

META stock has been a warrior since earnings as its gone up 25% from $

The Est. LTG is 12% this qtr, up from 11% last qtr. That’s an analyst estimate of what profits could grow over the next 3-5 years, not estimated stock growth. I think META can grow profits 20% to 25% a year.

Qtrly profit Estimates show growth is expected to slow in the coming quarters due to higher spending on AI infrastructure.

Earnings Table

• Ad revenue growth was strongest in Rest of World (+19%), followed by North America (+18%) and Europe (+14%). Asia Pacific was (+12%).
• Ad impressions increased 5%. Average price per ad increased 10%.
• Family of apps other revenue is up 34%, primarily driven by business messaging revenue growth from WhatsApp Business platform as well as Meta verified.
• Reality Labs revenue was -6% year over year, dues to lower Meta Quest sales, which were partially offset by increased sales of Ray-Ban Meta AI glasses.
• Daily active people (DAP) was 3.43 billion on average, an increase of 6% year-over-year.

Annual Profit Estimates are down this qtr. For 2025, management expects CapEx growth to be in range of $64 billion to $72 billion, driven by additional data center investments to support AI efforts. Note, Meta’s CapEx was $39 billion in 2024.

Qtrly Profit Estimates are for 12%  -3%, -7%, and 2% profit growth in the next 4 qtrs. Analysts think Meta’s revenue will grow 14% next qtr.

Fair Value

META’s current P/E is 27 and m

But this report is so good I can imagine the stock continuing higher.

2026 Est Fair Value sits at $765 a share, giving the stock upside of 11%.

Bottom Line

Meta Platforms’ (META) ten-year chart is ugly.

Meta is executing magnificently right now.  The lower profit estimates are ok with investors as the AI spend is improving results as profit magins swell.And my guess is the company will keep beating the street anyway.

META slips from 5th to 7th in the Growth Portfolio Power Rankings as the stock’s 2025 upside has gone from +9% to 0% since last qtr.

In the Aggressive Growth Portfolio the stock drops from 5th to 9th in the Power Rankings.

Power Rankings

7 of 32

Aggressive Growth Portfolio

9 of 13

Conservative Stock Portfolio

N/A