For those unfamiliar with Meta, it continues to stand out as one of the most dominant and well-positioned companies in today’s market. The numbers speak for themselves: Meta’s family of apps now sees 3.43 billion daily active users, with meaningful growth in user engagement across platforms.
Recent improvements to the company’s recommendation algorithms have significantly increased time spent across its ecosystem. Over just the past six months, Meta reported a 7% rise in time spent on Facebook, a 6% increase on Instagram, and an impressive 35% increase on Threads.
Threads, in particular, now has over 350 million monthly active users—despite the fact that it is not yet monetized, as the company continues to prioritize product development over ad load.
What makes Meta especially compelling is the powerful intersection of scale and technology. A growing user base and rising engagement levels translate directly into more real estate for advertisers. But Meta’s edge goes beyond reach: its advertising systems are so advanced that, in many cases, they require minimal input from advertisers. The platform uses vast amounts of user interaction data to automatically optimize ad performance and targeting.
This is what sets Meta apart. The combination of one of the world’s largest active user bases and cutting-edge ad tech gives the company a pricing and performance advantage that few can match. Advertisers are willing to pay more because Meta consistently delivers results. And as its AI initiatives—including its standalone personal assistant app—continue to evolve, Meta’s platform is poised to become even more personalized, effective, and defensible.
Simply put, Meta’s growth engine remains robust—and it’s still early in its AI monetization journey.
After a standout performance in 2024, Meta entered 2025 in a position of strength—only to see its stock temporarily retreat alongside the broader AI sector during a turbulent start to the year. The combination of headline-driven fears, including concerns over advancements from Chinese AI competitor DeepSeek and President Trump’s new wave of global tariffs, pushed investors toward safer assets and pressured high-growth tech names.
Despite that backdrop, Meta’s business fundamentals have remained resilient. The company delivered strong first-quarter results, exceeding expectations across both revenue and profitability metrics. Operating margins expanded 360 basis points to reach 41%, while ad spending across its platforms held up well—even in a choppy macro environment.
Notably, Meta has quickly emerged as a leader in the AI arms race. Its Meta AI assistant is now the most widely used in the market, and the company’s early investments in generative AI are paying off. More than 4 million advertisers are now using Meta’s AI-powered creative tools—a fourfold increase over just six months. These tools, along with continued improvements in ad ranking algorithms, are driving more personalized ad experiences and improving return on ad spend.
Given this momentum, we’ve raised our fair value estimate for Meta from $590 to $770. This revision reflects increasing confidence in Meta’s ability to monetize its AI capabilities and deepen its competitive moat. While the stock saw significant gains last year and early this year, we believe there’s still room for upside—particularly on pullbacks. For investors looking to initiate or add to a position, the $520–$550 range presents a reasonable entry point, with flexibility to add should volatility persist.
In short, Meta is executing well, innovating faster than many expected, and remains a top name to watch in the evolving AI-driven digital economy.
Meta reported impressive first-quarter results, with revenue climbing 16% year-over-year to $42.31 billion, beating the $41.10 billion consensus estimate from LSEG.
Earnings came in well ahead of expectations at $6.43 per share versus $5.28 forecasted. Net income surged to $16.64 billion, a 35% increase from $12.37 billion in the same quarter last year.
The company issued in-line revenue guidance for Q2, projecting between $42.5 billion and $45.5 billion, compared to the $44.03 billion estimate. Advertising revenue reached $41.39 billion, surpassing the $40.44 billion forecast.
Management also raised its 2024 capital expenditures forecast to a range of $64 billion to $72 billion (up from $60 billion–$65 billion), citing increased investments in AI infrastructure and anticipated hardware cost pressures related to ongoing trade uncertainty.
Operationally, Meta continues to show strength in user engagement. Family daily active people (DAP)—a metric encompassing users across Instagram, WhatsApp, Facebook, Messenger, and Threads—grew 6% year-over-year. This supported a 5% rise in ad impressions and a 10% increase in average price per ad.
Meta’s results highlight its position as one of the most resilient and cash-generative growth companies in the market. The company is effectively managing expenses while maintaining long-term investment in high-impact areas like AI and data infrastructure.
Despite continued losses from its Reality Labs division, Meta’s ability to self-fund innovation while delivering on profitability makes it a compelling long-term holding.
Meta is projecting second-quarter 2025 revenue in the range of $42.5 billion to $45.5 billion. At the midpoint of $44 billion, that would represent a 12.6% year-over-year increase—impressive given the tough comparison to Q2 2024, when revenue climbed 22%.
On the expense front, the company is tightening its full-year operating expense guidance, reducing it slightly from $114–$119 billion to $113–$118 billion. However, Meta raised its capital expenditures outlook for 2025 to $64–$72 billion, up from its previous range of $60–$65 billion.
The increase in capex is largely being directed toward generative AI and core infrastructure. Meta is investing heavily in its data center footprint and backend systems to support growing AI workloads while retaining operational agility to meet evolving consumer behavior. Management emphasized that these AI investments are already producing meaningful returns, particularly in driving engagement.
One notable example: Meta’s AI-powered content recommendation systems led to a 7% increase in time spent on Facebook and a 6% increase on Instagram—clear indicators that AI is enhancing user retention and platform stickiness.
These efforts reinforce Meta’s long-term strategy of marrying AI capabilities with scale, engagement, and monetization.
Analysts Ratings
RBC Capital Reiterates Outperform on Meta Platforms, Maintains $740 Price Target
Morgan Stanley Maintains Overweight on Meta Platforms, Raises Price Target to $650
JMP Securities Reiterates Market Outperform on Meta Platforms, Maintains $750 Price Target
Cantor Fitzgerald Maintains Overweight on Meta Platforms, Raises Price Target to $676
Stifel Maintains Buy on Meta Platforms, Raises Price Target to $655
Barclays Maintains Overweight on Meta Platforms, Lowers Price Target to $640
Truist Securities Maintains Buy on Meta Platforms, Raises Price Target to $720
TD Securities Maintains Buy on Meta Platforms, Lowers Price Target to $700
