One estimate suggests the metaverse will be worth $800 billion in 2024, growing at 13.1% each year, which could mean a $1.6 trillion annual value by 2030. Another estimate suggests it could be worth up to $30 trillion over the next 10 years. Either way, it makes the $10 billion Reality Labs loss look like a drop in the ocean by comparison. © 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions.

The company generated $12.5 billion in free cash flow in Q4 2021, a 35% year-over-year increase, even with the additional spending. Meta Platforms, Inc., engages in the development of social media applications. It builds technology that helps people connect, find communities, and grow businesses.

• The company is scheduled to release its next quarterly earnings announcement on Wednesday, October 25th 2023.
• It has fallen significantly from its previous highs but remains a behemoth in the world of social media.
• The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Microsoft.
• The company began to feel its impact in its 2021 Q3, but management revealed the full scope of its effect in Q4.

On the one hand, the move to the metaverse expands its total addressable market, which could keep revenue growing for more than a decade. On the other hand, some investors are worried about the resources in time and capital that Meta Platforms could allocate to the project with uncertain outcomes. Nevertheless, the company’s core social media business is experiencing robust user and revenue growth at a massive scale. Let’s try to grasp Meta Platforms’ business better and determine whether it’s a buy, sell, or hold for 2022. Meta is intentionally moving beyond being a social media company, so owning the stock means that you are buying into the company’s metaverse plans.

Why Meta Stock Is Surging Today

Worldwide uncertainty about a potential future recession, as well as the war in Ukraine, have also made investors skittish and caused many to flee stocks for safer harbors. The Federal Reserve’s response of boosting interest rates, with many expecting rate increases to continue through 2023 worsened the slump. Meta is a company that needs to prove itself as it changes directions toward the metaverse, but if you buy the story behind it, it’s hard not to like the stock at this price. “With better monetization, additional room for cost efficiency, and increased scrutiny of TikTok, we continue to like the setup for FY23,” wrote the analysts, who recommend buying the stock. Even with the hot start to the year, Meta shares are still about 37% below their record high from September 2021.

The Motley Fool has positions in and recommends Meta Platforms, Inc. The company beat revenue expectations in the final quarter of 2022, bringing in $32.2 billion. Facebook’s user numbers also managed to inch up in the last quarter with the platform hitting 1.98 billion daily active users and 2.96 billion monthly active users as of September 2022. Assuming Meta Platforms’ earnings grow at an annual rate of 25% through 2030, then the company’s earnings could increase to $74.6 per share at the end of the forecast period. Now, Meta Platforms has traded  at an average of 25 times forward earnings for the five years.

More Thursday Stock Market News

It has fallen significantly from its previous highs but remains a behemoth in the world of social media. That could mean right now is the time for interested investors to buy in at a discount. Another reason could be reports of layoffs at TikTok owner ByteDance. TikTok is a rising power in the world of social media, so any bad news for TikTok is good news for companies like Meta and Twitter.

If that were to happen, Meta’s massive advertising business could slow down as companies pull back on spending. After ending last year with a loss of more than 60 percent, Meta’s stock is up more than 50 percent this year, as the mood among tech investors has brightened. The Nasdaq Composite, an index that includes many tech companies, including Meta, has risen nearly 20 percent this year. The average analyst rating for Meta Platforms stock from 46 stock analysts is “Strong Buy”. This means that analysts believe this stock is likely to perform very well in the near future and significantly outperform the market. For investors with a long-term time horizon, buying the stock today might be a genius move when looking back in 10 years, even if it does dip again in the short term.

A tech stock rebound is fueling Meta’s jump.

Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer. One share of META stock can currently be purchased for approximately $303.06. Sign-up to receive the latest news and ratings for Meta Platforms and its competitors with MarketBeat’s FREE daily newsletter.

Assuming a similar multiple in 2030, Meta Platforms’ stock price could hit $1,865, which would be nearly nine times the company’s closing stock price on March 2. Meta looks like a company in a transition period; its social media networks aren’t delivering the type of growth that investors might have come to expect. Still, Meta is about as close to being a social media monopoly as you can get, and the business is generating more free cash flow each quarter than most companies do as revenue in a year. Social media giant Meta Platforms (META -1.92%) recently reported earnings for its 2021 fourth quarter, and the results shocked investors enough to sell the stock down more than 20%.

In the spring, Apple launched changes to its iOS platform to limit how digital advertisers tracked and targeted iPhone users. If you have an iPhone, you have probably seen this; apps will ask you to opt into being tracked. Users can opt out of being tracked, making Meta’s advertising platform less effective. The company began to feel its impact in its 2021 Q3, but management revealed the full scope of its effect in Q4. The good news for META stock starts with its diluted earnings per share of $2.20. That’s better than the $1.95 per share Wall Street was expecting in Q1 even if it’s a 19% drop year-over-year (YOY) from $2.72.

Amazon, Alphabet, Meta, and 12 More Stocks Wall Street Loves for 2024

As flexible as open-source models are, there are fears they could be used for malicious purposes, such as spreading misinformation or infringing on copyright. The Journal reported that Meta’s lawyers had raised concerns about potential misuses of the company’s AI model. Open-source models are free to access and allow users to modify and use the AI however they want, although Meta’s models have restrictions and users must follow the company’s terms of service. Shares of Meta Platforms (META -1.92%), the parent company of Facebook, were rising quickly today on seemingly no company-specific news. Instead, a rebound in the tech sector appears to be sending Meta’s stock higher today. In the call, Meta’s chief executive called out Instagram Reels and the company’s algorithmic recommendation engine as two major areas of focus in the coming months.

Better-than-expected reports from Microsoft and Alphabet helped lift shares of the Facebook parent today.

The new name describes the metaverse and refers to the seamless social interaction provided by Meta’s social media application universe. Investors will need to decide whether they are willing to weather the volatility inherent in tech stocks or make a bet on the future of the metaverse before investing in Meta. Investors https://bigbostrade.com/ may also be intrigued by the company’s investment in technologies like the metaverse. Though it has been, thus far, largely panned, there’s no telling what the future holds, especially when it comes to technology. The company has also gone all-in on its vision for the metaverse, a virtual reality world.

On the whole, Zuckerberg dramatically deemphasized the metaverse — the concept the company rebranded around in 2021 — in favor of playing up Meta’s trendier AI work. Its top line is expected to jump 17% to $155 billion, while earnings per share are expected to jump 17% to $14.7. What’s more, Meta’s top and bottom lines are expected to head higher in 2024 as well, as seen in the chart below. The prospectus stated the company was seeking to raise $5 billion but it got so much more.

The metaverse segment, or “Reality Labs,” which contains Oculus, showed significant operating losses. “Multi-year AI driven platform retention could help multiple expansion, as terminal value uncertainty has weighed on valuation.” Piper Sandler analysts, who also have a buy rating on the stock, said Meta is in a favorable revenue position for the rest of the year. They noted that “user growth remains strong” and said the business can keep expanding even with lower headcount.

Musk and Zuckerberg Talk AI. Lawmakers Will Be Hanging on Every Word.

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Mark Zuckerburg retained 22% ownership in the company following the IPO, and 57% of the voting rights. As of 2022, those holdings were down to about 14% of the company and 54% of the voting rights. We’ll learn more when Meta releases its first-quarter earnings report after hours today. Analysts are expecting revenue to dip 0.9% to $27.65 billion and for earnings per share to fall from $2.72 to $2.03.