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Meta Platforms Stock (NASDAQ: META) Can Further Rally; Should You Buy?

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TL;DR Breakdown

  • Meta’s investment in cutting-edge technologies like AI and the Metaverse is driving its impressive stock performance.
  • Meta’s focus on the metaverse has attracted investor attention and opened up new possibilities for communication, entertainment, and commerce.
  • Meta’s combination of AI advancements and hardware manufacturing is fueling its growth and innovation in advertising and AI technologies.

Meta Platform, formerly known as Facebook, has experienced a remarkable surge in its stock performance, defying expectations and surpassing its FAANG counterparts. Since hitting its lowest point in November of the previous year, Meta’s stock price has soared by over 185%. This impressive rally has caught the attention of both investors and Wall Street analysts, who remain confident in the company’s future prospects and its ability to maintain momentum.

One of the key factors contributing to Meta’s impressive performance is its commitment to investing in cutting-edge technologies, particularly in the areas of artificial intelligence (AI) and the Metaverse. Meta Platforms has been actively exploring and developing advanced AI technologies, which have proven to be a significant driver of the company’s success. AI plays a crucial role in enhancing Meta’s platforms, such as Facebook, Instagram, WhatsApp, and Messenger, by improving user experiences, optimizing content delivery, and enabling more targeted advertising.

Trends in a stock’s price are key

How about public sentiment as a huge driver to selling stocks? Global tech companies including Facebook parent Meta rely on armies of outsourced workers. This is where momentum investing comes in, or the idea of following a stock’s recent trend, which can be in either direction. Investors have observed that, and swear by its veracity, once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue.

Metaverse shapes the Meta platforms’ future

The potential of the Metaverse is another exciting avenue that Meta Platforms is pursuing. The “metaverse” refers to a virtual reality space where users can interact with each other and digital content in a highly immersive environment. Meta has been investing heavily in building the infrastructure and technologies necessary to create a robust and engaging Metaverse experience. The company envisions a future where people can seamlessly connect, collaborate, and explore virtual worlds, opening up new possibilities for communication, entertainment, and commerce.

The market’s response to Meta’s focus on AI and the metaverse has been overwhelmingly positive. Investors have recognized the potential for significant growth and innovation in these areas, leading to increased confidence in Meta’s stock. As a result, many investors are reentering the market and purchasing Meta Platforms shares, viewing the company as undervalued during its oversold phase in the previous autumn.

Meta Platforms has the potential to extend its rally even further. The next few months are expected to be exhilarating for the company as it continues to captivate investors and demonstrate its commitment to pushing the boundaries of technology. The ongoing advancements in AI and the progress towards building the Metaverse are likely to generate considerable excitement and interest among investors, potentially driving Meta’s stock price to new all-time highs.

Meta combines AI and hardware manufacturing for growth

Meta is leveraging the power of AI to enhance the value of its ads without relying on user tracking across the internet. With its Advantage+ suite of automation tools, powered by AI algorithms, Meta can generate multiple ad variations to find the most effective ones for individual users. This approach respects user privacy while still delivering personalized and compelling advertisements. Apple’s privacy-focused iOS updates, though initially challenging for Meta, have pushed the company to innovate and find new ways to deliver targeted advertising.

Meta is expanding its horizons beyond advertising technology and venturing into the hardware realm. The company has announced its intention to create a specialized AI chip called the Meta Training and Inference Accelerator (MTIA) by 2025. This custom chip is designed to enhance AI computations, increase efficiency, and grant Meta greater control over its technology stack. By developing these custom AI chips, Meta is strategically positioning itself to meet the growing demand for AI-driven applications while maintaining a competitive edge in the industry. These hardware advancements, combined with Meta’s AI-driven approach, underscore the company’s dedication to innovation and its vision of shaping the future of advertising and AI technologies.

Wall Street’s take on Meta

Meta Platforms’ stock, according to Wall Street analysts, is considered a “strong buy.” Out of the 46 analyst ratings, 39 of them are buying recommendations, five are held recommendations, and two are sell recommendations. The average price target for Meta stock stands at $281.05, suggesting a potential upside of 11.2%. However, individual analyst price targets vary, with a low estimate of $220.00 per share and a high estimate of $350.00 per share. This range reflects differing opinions and expectations regarding Meta’s future performance.

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