Meta Platforms Stock: Why You Still Have Time to Buy

Meta Platforms' 3.4 billion user base grew 6% YoY in Q1, with ad revenue increasing 16% YoY. The company's focus on AI and plans to spend $64-$72 billion on capital expenditures in 2025 may drive growth. Despite a 650% price increase since October 2022, Meta's 27 P/E ratio is below the S&P 500 average and the lowest among the "Magnificent Seven". This suggests it may still be a good time to buy the stock.

Meta Platforms, Inc. (NASDAQ:META) reported robust financial performance for the first quarter of 2025, with a significant increase in user base and ad revenue. The company's focus on artificial intelligence (AI) and substantial capital expenditures are poised to drive future growth. Despite a substantial price increase since October 2022, the stock remains undervalued compared to its peers.

User Growth and Ad Revenue

Meta Platforms' user base grew by 6% year-over-year (YoY) in Q1 2025, reaching 3.4 billion users [1]. This growth was accompanied by a 16% YoY increase in ad revenue, demonstrating the company's ability to capitalize on its expanding user base. The Family of Apps segment, which includes Facebook, Instagram, Messenger, and WhatsApp, continues to be the primary driver of growth.

Capital Expenditures and AI Investment

Meta Platforms is investing heavily in AI and capital expenditures (CapEx) to stay competitive in the rapidly evolving tech landscape. The company plans to spend between $64 billion and $72 billion on CapEx in 2025, a significant increase from previous years [2]. This investment includes acquiring stakes in AI startups, such as Scale AI, and recruiting top talent from industry leaders like Apple, Google, and OpenAI.

Stock Performance and Valuation

Meta Platforms' stock has seen a remarkable 650% price increase since October 2022, reaching an all-time high of $747.90 [1]. Despite this significant increase, the company's price-to-earnings (P/E) ratio of 27.47 is below the S&P 500 average and the lowest among the "Magnificent Seven" tech giants. This suggests that the stock may still be undervalued, presenting a potential opportunity for investors.

Analyst Sentiment

Analysts have mixed opinions on Meta Platforms. While some have increased their price targets and given the stock an "outperform" or "buy" rating, others have reduced their targets or maintained a hold rating. Overall, the stock has an average rating of "Moderate Buy" with an average price target of $736.05 [1].

Conclusion

Meta Platforms' Q1 2025 financials indicate strong growth and a commitment to AI and CapEx. While the stock has seen significant price appreciation, its valuation remains attractive compared to its peers. Investors should closely monitor the company's AI initiatives and future financial performance to assess the stock's potential.

References

[1] https://www.marketbeat.com/instant-alerts/filing-meta-platforms-inc-nasdaqmeta-shares-sold-by-prevail-innovative-wealth-advisors-llc-2025-07-20/
[2] https://www.reuters.com/commentary/breakingviews/metas-buy-and-build-ai-merger-lacks-synergy-2025-07-16/