Meta's AI Push: Is the Magnificent 7 Stock Still Worth the Hype in 2025?

Meta Platforms, one of the Magnificent 7 tech stocks, has returned 679% in the past decade and is up 24% this year. The company has made a comeback after committing to a "year of efficiency" in 2024, with profits increasing and investor confidence growing. Despite a heavy investment cycle, Meta reported $42.3 billion in revenue in Q1, up 16% YoY, and diluted earnings increased by 37% to $6.43 per share. The company's Family of Apps segment is highly profitable, while the Reality Labs division continues to report losses, but Meta believes this is a long-term investment.

Meta Platforms, Inc. (META), one of the Magnificent 7 tech stocks, has experienced a remarkable turnaround in recent years. Over the past decade, the company has returned an impressive 679%, and as of July 2025, it has surged by 24% this year alone. This performance comes after the company committed to a "year of efficiency" in 2024, leading to increased profits and growing investor confidence [1].

In the first quarter of 2025, Meta reported $42.3 billion in revenue, up 16% year-over-year (YoY), and diluted earnings increased by 37% to $6.43 per share. The Family of Apps segment continues to be highly profitable, while the Reality Labs division, despite reporting losses, is seen as a long-term investment by the company [1].

Meta's strategic focus has shifted towards smart glasses and AI wearables, as indicated by its recent $3.5 billion investment in EssilorLuxottica, the parent company of Ray-Ban and Oakley. This move is part of a broader hardware and AI wearable strategy, signaling a pivot from virtual reality goggles, which have not achieved the anticipated success [2].

Analysts remain bullish on Meta's prospects. BofA analyst Justin Post raised the price target for the company from $690 to $765, maintaining a Buy rating. The average one-year price target among 61 analysts is $731.07, with a high estimate of $935.00 and a low estimate of $525.00 [2].

Despite the heavy investment cycle, Meta's strong financial performance and strategic initiatives indicate a promising future. The company's ability to navigate challenges and adapt to new technologies positions it well for continued growth.

References:
[1] https://portfolioslab.com/symbol/META
[2] https://www.gurufocus.com/news/2968570/meta-platforms-meta-increases-strategic-focus-with-new-investment-meta-stock-news