Some investors might believe now is not the best moment to purchase Meta Platforms (META) shares, given its substantial presence in social media. However, with over 40% of the global population accessing a Meta-owned site daily, this could suggest that the platform has reached a plateau in terms of growth. Notably, the stock price has soared by over 650% from its October 2022 lows and is currently trading at a record high.
Even though these advancements have been made, Meta might still be primed for ongoing expansion. Here’s a reason why investing in this social media giant could still be a viable option.
The continuing case for Meta Platforms stock
Meta Platforms is not yet at a point of stagnation. Despite boasting a colossal user base of 3.4 billion, the number of individuals utilizing its platforms actually expanded by 6% within the past year during its latest reported quarter. This influx of users contributes to an increase in advertising revenue, which climbed 16% compared to the same period last year in Q1.
It’s true that almost all of Meta’s income comes from ads at the moment, but as the ad market gets more crowded, growth could eventually level off. Yet, Meta’s work in artificial intelligence (AI) may inject new vigor into its shares.
This advantage arises due to the vast quantity of individual user data that Meta produces, which might be beyond the reach of competitors like Apple or Alphabet. This allows for superior training of AI models, giving Meta an edge.
Furthermore, Meta plans to invest between $64 billion and $72 billion on capital expenditures in 2025 to seize this opportunity and stay ahead in AI technology. This expense is manageable given its $50 billion in cash flow generated over the past year and its $70 billion in liquid assets.
Additionally, potential investors might find this venture appealing due to a relatively affordable entry point. Its P/E ratio of 27 stands not just below the typical S&P 500 average of 30 but also ranks as the second-lowest among the “Magnificent Seven” (Alphabet leads). This attractive valuation provides investors with a compelling reason to consider purchasing the stock, especially as its AI business is poised for significant growth.
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2025-07-20 03:43