From Nasdaq: 2025-06-06 10:17:00

Meta Platforms (META) shares have surged 16.9% YTD, outperforming rivals like Alphabet, Amazon, and Snap. META, Alphabet, and Amazon are projected to capture 50% of global ad spending by 2028. Meanwhile, shares of Alphabet, Amazon, and Snap have declined on a YTD basis, with the broader sector showing minimal gains.

Meta Platforms is focusing on integrating AI into its platforms to enhance user engagement and boost ad revenues. With over 3.43 billion daily users, META has a substantial data advantage. The company’s AI usage is increasing, with around one billion monthly users globally. Updates to improve personalized responses are expected to drive engagement further.

META shares are trading above the 50-day and 200-day moving averages, indicating a bullish trend. However, they are considered overvalued with a Value Score of D. META’s forward 12-month P/S ratio stands at 8.79X, a premium compared to the Internet Software industry’s 5.61X.

Meta Platforms aims to leverage AI to enhance advertising revenues. The company’s emphasis on personalization, voice conversations, and entertainment through Meta AI is a key catalyst. Investments in AI infrastructure and initiatives support META’s growth prospects. However, the lack of monetization on new platforms like Threads and Meta AI remains a concern.

META’s estimate revision shows a downward trend, with the consensus mark for Q2 2025 earnings at $5.83 per share, indicating a 12.98% YoY increase. For full-year 2025, the earnings estimate is $25.53 per share, signaling a 7% YoY growth over 2024. Despite the company’s AI advancements, uncertainties in ad revenues due to macroeconomic conditions pose challenges. META currently holds a Zacks Rank #3 (Hold).

Investors are advised to hold META stock for now, considering the company’s AI-driven growth potential. With heavy investments in AI technology and infrastructure, META is poised for long-term success. However, the lack of monetization on new platforms and macroeconomic uncertainties may impact ad revenues. META currently holds a Zacks Rank #3 (Hold), suggesting caution for investors.



Read more at Nasdaq: Meta Platforms Rises 17% Year to Date: Buy, Sell or Hold META Stock?