Meta Platforms (META), previously known as Facebook, has rebranded, restructured, and reimagined itself under CEO Mark Zuckerberg’s ambitious vision. Meta, one of the elite Magnificent 7 tech stocks alongside Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Nvidia (NVDA), and Tesla (TSLA), has ridden the wave of tech dominance in the artificial intelligence (AI) era.
Meta stock has returned 679% in the past decade. So far this year, the stock is up 24%, outperforming the tech-heavy Nasdaq Composite Index’s ($NASX) 6.9% gains.
Is META still worth the hype? Let’s find out!
Meta Has Made a Stunning Comeback
Meta made a stunning comeback after committing to a “year of efficiency” in 2024. As a result, profits increased and investor confidence grew. The company’s ambitions are fueled by a significant investment in AI infrastructure. In the first quarter of 2025, the company released its most advanced large language model (LLMs) to date, Llama 4, which Zuckerberg described as one of the industry’s most efficient. To support ongoing development, Meta raised its fiscal 2025 capital expenditure outlook to $64 billion to $72 billion.
Despite its heavy investment cycle, Meta reported $42.3 billion in revenue in the first quarter, up 16% year on year. Diluted earnings increased by 37% to $6.43 per share, while free cash flow totaled $10.3 billion. Meta’s Family of Apps (FoA) segment, which includes all of its social media platforms, remains its primary revenue generator. Q1 revenue totaled $41.9 billion, with $41.4 billion coming from advertising. The segment saw a 5% increase in ad impressions and a 10% increase in ad pricing, thanks to strong online commerce results. Although FoA accounts for 81% of Meta’s total expenses ($20.1 billion), the segment generated $21.8 billion in operating income, representing a healthy 52% margin.
While the FoA business is highly profitable, the Reality Labs division, which is responsible for augmented and virtual reality, continues to report staggering losses. Q1 revenue fell 6% to $412 million, while expenses totaled $4.6 billion, resulting in a $4.2 billion operating loss. However, not all indicators are negative. Monthly actives for Ray-Ban smart glasses have quadrupled year over year, and Meta has announced new collaborations and product launches, including the Quest 3s.
While many on Wall Street see the metaverse as a money pit, Zuckerberg insists that Meta is playing the long game. Importantly, the company believes Reality Labs is a 10- to 15-year investment. While this long-term mindset may frustrate short-term investors, it is consistent with Zuckerberg’s previous willingness to forego short-term profits in favor of long-term dominance.
During the Q1 earnings call, Zuckerberg identified five strategic verticals in which AI is expected to drive long-term growth for Meta. These include advertising, content creation, business messaging, Meta AI, and hardware such as Ray-Ban smart glasses and the Quest 3S VR headset. Meta is not only investing heavily in the future, but it is also prioritizing near-term profitability and shareholder returns. During the quarter, the company repurchased $13.4 billion in stock and paid dividends totaling $1.3 billion.
Analysts expect Meta’s earnings to grow by 7.4% in 2025. Meta is still reasonably valued compared to other AI-driven tech stocks, trading at 28 times forward 2025 earnings.
Why Is Wall Street So Bullish About Meta Stock?
Overall, Wall Street rates this Mag 7 stock a “Strong Buy.” Of the 54 analysts covering Meta stock, 45 give it a “Strong Buy” rating, three recommend a “Moderate Buy,” five suggest holding, and one rates it a “Strong Sell.”
With 3.4 billion monthly active users across its platforms, Meta remains the world’s largest social media network. Meta’s AI-powered ad targeting and personalization continue to increase cost efficiency and engagement, ensuring that the FoA business remains resilient and scalable. Furthermore, with over $70 billion in cash and marketable securities alongside a manageable $28.8 billion in debt, Meta can weather economic downturns while investing aggressively in innovation.
Currently, Meta is valued at $1.8 trillion. However, it is still trading at a reasonable valuation given its long-term growth potential. Meta is hovering close to its average price target of $729.58. Meanwhile, the high price target of $935 implies that the stock could rise by up to 29% over the next year.
Is Meta Stock Still Worth the Hype in 2025?
Although metaverse-related losses could be restricting Meta’s stock surge today, Reality Labs could be a wildcard over the next few years. For now, Meta offers a rare combination of a high-margin core business, massive user scale, and a defensible, infrastructure-rich AI strategy, making it a compelling buy-and-hold tech stock for decades to come.
