Meta Platforms (META) Momentum Stock for Long-Term Growth

Meta Platforms (META) is a top momentum stock for the long-term, with a Momentum Style Score of B and VGM Score of B. The stock has seen a 2.1% increase in the past week and an 11.5% increase in the past four weeks. For fiscal 2025, 18 analysts revised their earnings estimate higher, with an average earnings surprise of 20.5%. META is a good investment option due to its impressive earnings fundamentals and strong momentum and VGM Style Scores.

Meta Platforms (META) has seen a significant surge in its stock price following its Q2 earnings report, which exceeded market expectations. The company reported a 22% year-over-year increase in revenue to $39.1 billion and a 38% growth in earnings per share (EPS) to $7.14 [1]. The strong performance can be attributed to effective monetization of AI investments through improved ad targeting and increased user engagement.

The company has secured $29 billion in funding to support its AI infrastructure expansion, with Pacific Investment Management (PIMCO) leading a $26 billion debt package and Blue Owl Capital contributing $3 billion in equity [3]. This strategic move aims to accelerate the growth of Meta’s AI capabilities and position the company as a leader in the AI data center market, which is projected to reach $6.7 trillion by 2030 [3].

The company has raised its capital expenditure (capex) guidance for the year to $66 billion to $72 billion, with a substantial portion allocated to building AI infrastructure. This shift towards debt financing for AI ambitions reflects a significant departure from Meta’s historically cash-rich model [1].

Analysts remain cautiously optimistic about Meta’s AI strategy. Guggenheim analyst Michael Morris raised the firm’s price target on Meta Platforms to $800 from $725 and maintained a Buy rating ahead of Q2 earnings [3]. Of 68 analysts covering the shares, 58 recommend buying, with nine having Strong Buy ratings [3]. The average price target is $872.50, suggesting an 11.6% upside potential from the current share price of $761.83 [1].

However, there are potential risks associated with Meta’s AI investments. The company’s shift to debt financing raises concerns about potential cash flow constraints and profitability if AI returns fall short of expectations. Additionally, the lack of clear timelines for AI monetization and parallels to Meta’s previous high-cost investments in Reality Labs have sparked skepticism among investors [1].

Despite these risks, Meta’s focus on AI and its recent financial performance have analysts bullish on the company’s prospects. The company expects third-quarter 2025 revenue to range from $47.5 billion to $50.5 billion [2]. CEO Mark Zuckerberg’s plans to invest heavily in AI infrastructure and attract top talent are central to Meta’s strategy. The company’s ability to sustain strong ad revenue while increasing efficiency will be key to driving its bottom line despite higher capital expenditures for AI objectives.

Meta Platforms (META) is a top momentum stock for the long-term, with a Momentum Style Score of B and VGM Score of B. The stock has seen a 2.1% increase in the past week and an 11.5% increase in the past four weeks. For fiscal 2025, 18 analysts revised their earnings estimate higher, with an average earnings surprise of 20.5%. META is a good investment option due to its impressive earnings fundamentals and strong momentum and VGM Style Scores [2].

References:
[1] https://www.ainvest.com/news/meta-platforms-q2-earnings-exceed-expectations-future-outlook-uncertain-2508-88/
[2] https://247wallst.com/investing/2025/08/14/meta-platforms-nasdaq-meta-stock-price-prediction-for-2025-where-will-it-be-in-1-year/
[3] https://www.ainvest.com/news/meta-secures-29-billion-ai-infrastructure-pimco-blue-owl-lead-funding-2508/