Meta’s Rather Spiffing Turnaround

Now, one wouldn’t have thought, just a short while ago, that Meta Platforms (META 2.95%) was anything other than a bit of a damp squib. The shares, you see, had been rather stubbornly refusing to get on with things, stuck in a bit of a rut. But dash it all, what a change! The company has recently announced results that have sent a positively cheerful ripple through the market, and the share price has responded with a jump that can only be described as spiffing.

One feels, naturally, a certain degree of interest in the details, to ascertain whether this upward trajectory is likely to continue. Let’s have a closer look, shall we?

Full Steam Ahead, What!

There had been whispers, you know, about Meta’s capital expenditures (capex). Some rather gloomy chaps were suggesting it was all a bit excessive. But the company, bless its heart, hasn’t batted an eyelid. It’s upping the ante to a rather substantial $115 billion to $135 billion for 2026 – a considerable jump from the already healthy $72.2 billion spent in 2025. The bulk of this, naturally, is being directed towards those modern marvels, artificial intelligence (AI). There’s a slight cloud on the horizon – losses at the Reality Labs division are expected to remain, shall we say, robust, peaking this year. But one mustn’t be a spoilsport, must one?

Meanwhile, the core business is humming along nicely. Revenue for the quarter jumped a jolly 24% year over year to $59.9 billion, while adjusted EPS rose by a respectable 11% to $8.88. Analysts, those clever chaps at LSEG, were anticipating $58.6 billion and $8.23 respectively, so Meta has rather outdone itself.

Advertising revenue, the lifeblood of any modern enterprise, also experienced a cheerful 24% jump, reaching $58.1 billion. Revenue at Reality Labs, home to those futuristic metaverse contraptions, did dip 12% year over year to $955 million, but one mustn’t let a little thing like that dampen the spirits. Operating income from the social media apps increased a healthy 9% to $30.8 billion, while Reality Labs posted a loss of $6 billion, a bit more than the previous year’s $5 billion, but these things happen.

Meta’s advertising growth, you see, is being driven by an 18% increase in ad impressions and a 6% rise in the average price per ad. And the company continues to swell its ranks of users. Family daily active people (DAP), a measurement of those who log in daily, rose a commendable 7% year over year to 3.58 billion. Quite a crowd, what!

Looking ahead, Meta is guiding for Q4 revenue to be between $53.5 billion and $56.5 billion, which equates to growth of between 26% to 34% year over year. A dashedly promising outlook, wouldn’t you agree?

Is Meta Platforms’ Stock a Buy, Then?

Trading at a forward price-to-earnings (P/E) ratio of around 24 times 2026 analyst estimates, Meta is looking rather attractive, especially when one considers it’s one of the cheapest megacap AI stocks around. And its core advertising business is positively firing on all cylinders, powered by those ingenious GEM and sequence learning models, which are driving both ad impressions and conversions. The company also plans to expand ads on WhatsApp and Threads, which are still in their early stages of monetization, offering another potential avenue for growth. A most clever bit of planning, what!

Given its valuation and growth outlook, this is a stock to own for 2026, even after this recent jump in share price. One feels, with a degree of confidence, that Meta has turned a corner. It’s a bit like a slightly bewildered protagonist finally being rescued by a brilliantly efficient Jeeves – a most satisfying outcome, wouldn’t you say?

2026-02-02 11:02

Full Steam Ahead, What!

Is Meta Platforms’ Stock a Buy, Then?

Read More