Meta Platforms Analyst Expects 'Strong Momentum' In Q4 To Continue In 2025

Meta Platforms Inc. (NASDAQ: META), the tech giant formerly known as Facebook, is expected to maintain its strong momentum in the fourth quarter of 2024 and carry it into 2025, according to a recent analysis by Goldman Sachs. The investment bank raised its 12-month price target for META stock to $688, reflecting higher revenue estimates driven by positive channel checks and several advertising opportunities.

One of the key factors contributing to Meta's expected strong performance is its advertising business, which is projected to achieve compounded mid-teens revenue growth in the fourth quarter and sustain that momentum into 2025. This growth is supported by positive channel checks and several advertising opportunities, including:

1. Increasing ad load on Reels: Meta's short-form video platform, Reels, is expected to drive advertising revenue growth by increasing ad load.
2. Utilizing WhatsApp and Messenger for ad revenue: Meta's messaging platforms, WhatsApp and Messenger, have untapped potential for generating ad revenue.
3. Exploring new ad formats: Meta is investigating new ad formats like click-to-message ads and paid messaging, which could further boost advertising revenue.
4. Potential redistribution of advertising dollars: If the Protecting Americans from Foreign Adversary Controlled Applications Act is upheld and TikTok is banned in the U.S., advertising dollars could be redistributed to platforms like Meta.

In addition to its advertising business, Meta is also expected to benefit from several long-term AI revenue opportunities, such as:

1. Sponsored search results within Meta AI conversations: Meta's AI assistant could generate revenue through sponsored search results within AI conversations.
2. Licensing its Llama AI models for enterprise use: Meta's advanced AI models, like Llama, could be licensed for enterprise use, generating additional revenue streams.

Goldman Sachs analyst Eric Sheridan noted that these AI opportunities are still in their early stages, and better visibility into their development and adoption is needed before factoring them into forecasts as material revenue drivers. However, the analyst sees a path to Meta delivering toward the top end of its revenue guidance range for Q4'24 and sustained ~mid-teens % total revenue growth through 2025.

Meta is due to report earnings after the market close on January 29, 2025. Analysts expect the company to report earnings of $6.77 per share and revenue of about $47 billion, according to estimates from. META shares closed Tuesday down 2.31% at $594.25, according to data from.




In conclusion, Meta Platforms Inc. is expected to maintain its strong momentum in the fourth quarter of 2024 and carry it into 2025, driven by its advertising business and long-term AI revenue opportunities. The company's positive channel checks and several advertising opportunities, combined with its AI assistant and advanced AI models, position it well for continued growth and success. As Meta prepares to report its fourth-quarter earnings on January 29, 2025, investors and analysts alike will be watching closely to see if the company can deliver on its expected strong performance.