From Nasdaq: 2025-05-13 12:19:00

1. Meta Platforms (META) shares are trading at a premium compared to the Zacks Computer & Technology sector, with a forward 12-month P/E of 24.18X. META, Alphabet (GOOGL), and Amazon (AMZN) are expected to capture 50% of global ad spending by 2028.
2. Meta Platforms leverages AI to enhance user engagement and improve advertising revenue. META’s AI initiatives, including Andromeda powered by NVIDIA (NVDA), have shown recall and ad quality improvements, driving user engagement and conversion rates.
3. META’s estimate for Q2 2025 earnings has increased by 3.2% to $5.84 per share, with a projected 13.18% year-over-year increase. META has consistently beaten earnings estimates in the past four quarters, with an average surprise of 17.30%.
4. Despite positive AI initiatives, META faces risks from higher operating expenses, regulatory concerns, and tariffs. Heavy investments in AI infrastructure and expanding platforms like Threads and Meta AI are driving capital expenditure but lack clear monetization strategies.
5. Investors should consider holding META stock, given its AI focus and potential for growth. However, concerns around regulatory issues, tariffs, and lack of monetization on new platforms pose risks. META currently has a Zacks Rank #3 (Hold), suggesting a wait-and-see approach for investors.
6. Meta Platforms’ performance is above the 50-day and 200-day moving averages, indicating a bullish trend. The company’s strategic focus on AI and innovation is driving engagement and revenue growth, positioning META for further success in the digital advertising market.

Read more at Nasdaq: Is META Stock’s 24.18X PE Still Worth it? Buy, Sell, or Hold?