Meta Platforms (NASDAQ:META) Shares Gap Up - Should You Buy?

Key Points

• Meta shares gapped up sharply before trading on Wednesday, opening at $607.91 after closing at $563.29 and later trading around $614.85.
• Investor optimism was driven by reports that Meta is exploring a cloud business for selling excess AI compute capacity, which could create a new revenue stream and offset heavy infrastructure spending.
• Despite the rally, Meta faces a legal overhang after losing its bid to dismiss a multistate lawsuit alleging Facebook and Instagram were designed to addict children; the case is now headed toward trial.

Meta Platforms, Inc. (NASDAQ:META - Get Free Report)'s share price gapped up prior to trading on Wednesday . The stock had previously closed at $563.29, but opened at $607.91. Meta Platforms shares last traded at $614.8510, with a volume of 10,455,333 shares traded.

More Meta Platforms News

Here are the key news stories impacting Meta Platforms this week:

• Positive Sentiment: Meta is reportedly building a cloud business that would let it sell spare AI compute capacity to third parties, potentially turning heavy infrastructure spending into a new profit source. Meta stock jumps on report of AI cloud business expansion plans
• Positive Sentiment: Reports that Meta could enter the AI compute market helped push the stock sharply higher, with investors viewing the move as a potential long-term growth driver. Meta Stock Rises on Report It's Building a Cloud Business. CoreWeave Drops.
• Neutral Sentiment: Commentary from analysts and media outlets is framing Meta’s AI push as a major strategic bet, but these pieces are largely opinion or outlook rather than new company-specific fundamentals. Meta Stock Price Prediction: The Forecast Sees a Path to $800+
• Neutral Sentiment: Meta’s reported plans to launch a prediction-market app add to speculation around new product expansion, but this looks less immediately material than the AI cloud news. Inside Zuckerberg's Reported Plan to Take On Kalshi and Polymarket in Prediction Markets
• Negative Sentiment: Meta lost a bid to dismiss a multistate lawsuit alleging Facebook and Instagram were designed to addict children, and the case is now headed toward trial, adding legal overhang. Meta Loses Bid to Dismiss States' Lawsuit Over Facebook and Instagram Addiction Claims as Judge Says Case Should Go to Trial

Analyst Upgrades and Downgrades

A number of analysts have weighed in on META shares. Mizuho reduced their price objective on shares of Meta Platforms from $850.00 to $835.00 and set an "outperform" rating for the company in a research note on Tuesday, May 5th. Weiss Ratings downgraded shares of Meta Platforms from a "buy (b-)" rating to a "hold (c+)" rating in a research report on Friday. Roth Mkm restated a "buy" rating on shares of Meta Platforms in a report on Thursday, April 30th. UBS Group lowered shares of Meta Platforms from a "buy" rating to a "neutral" rating in a report on Tuesday, June 2nd. Finally, Sanford C. Bernstein lowered their price objective on Meta Platforms from $900.00 to $850.00 and set an "outperform" rating on the stock in a research report on Thursday, April 30th. Three equities research analysts have rated the stock with a Strong Buy rating, thirty-four have assigned a Buy rating, ten have issued a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus target price of $840.60.

Meta Platforms Stock Performance

The business's fifty day moving average price is $607.50 and its 200-day moving average price is $629.23. The stock has a market cap of $1.57 trillion, a PE ratio of 22.67, a P/E/G ratio of 1.00 and a beta of 1.23. The company has a debt-to-equity ratio of 0.24, a quick ratio of 2.35 and a current ratio of 2.35.

Meta Platforms (NASDAQ:META - Get Free Report) last released its quarterly earnings data on Wednesday, April 29th. The social networking company reported $10.44 earnings per share for the quarter, beating the consensus estimate of $6.67 by $3.77. The firm had revenue of $56.31 billion during the quarter, compared to analysts' expectations of $55.56 billion. Meta Platforms had a net margin of 32.84% and a return on equity of 36.93%. The firm's quarterly revenue was up 33.1% on a year-over-year basis. During the same period in the previous year, the company earned $6.43 earnings per share. As a group, equities research analysts forecast that Meta Platforms, Inc. will post 29.35 EPS for the current fiscal year.

Meta Platforms Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Thursday, June 25th. Shareholders of record on Monday, June 15th were given a $0.525 dividend. This represents a $2.10 dividend on an annualized basis and a yield of 0.3%. The ex-dividend date of this dividend was Monday, June 15th. Meta Platforms's payout ratio is 7.63%.

Insider Buying and Selling at Meta Platforms

In other news, Director Robert M. Kimmitt sold 504 shares of the stock in a transaction on Monday, June 1st. The stock was sold at an average price of $629.29, for a total transaction of $317,162.16. Following the transaction, the director directly owned 3,943 shares of the company's stock, valued at $2,481,290.47. This represents a 11.33% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Curtis J. Mahoney sold 2,079 shares of the firm's stock in a transaction on Wednesday, May 27th. The stock was sold at an average price of $609.92, for a total value of $1,268,023.68. Following the completion of the transaction, the insider owned 1,118 shares in the company, valued at approximately $681,890.56. This trade represents a 65.03% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 39,013 shares of company stock worth $24,115,999. Insiders own 13.53% of the company's stock.

Institutional Investors Weigh In On Meta Platforms

Several hedge funds and other institutional investors have recently made changes to their positions in META. Vanguard Group Inc. grew its position in shares of Meta Platforms by 3.8% during the 4th quarter. Vanguard Group Inc. now owns 199,995,630 shares of the social networking company's stock valued at $132,015,115,000 after acquiring an additional 7,269,279 shares during the period. Auto Owners Insurance Co lifted its position in Meta Platforms by 76,587.7% during the fourth quarter. Auto Owners Insurance Co now owns 105,292,277 shares of the social networking company's stock valued at $69,502,379,000 after purchasing an additional 105,154,977 shares in the last quarter. State Street Corp lifted its position in Meta Platforms by 5.1% during the fourth quarter. State Street Corp now owns 90,841,345 shares of the social networking company's stock valued at $59,963,463,000 after purchasing an additional 4,395,763 shares in the last quarter. Geode Capital Management LLC grew its holdings in Meta Platforms by 1.7% during the fourth quarter. Geode Capital Management LLC now owns 52,806,712 shares of the social networking company's stock valued at $34,734,628,000 after purchasing an additional 878,396 shares during the period. Finally, Capital World Investors grew its holdings in Meta Platforms by 0.8% during the fourth quarter. Capital World Investors now owns 39,558,637 shares of the social networking company's stock valued at $26,112,735,000 after purchasing an additional 310,947 shares during the period. Hedge funds and other institutional investors own 79.91% of the company's stock.

Meta Platforms Company Profile

Meta Platforms, Inc NASDAQ: META, formerly Facebook, Inc, is a global technology company best known for building social networking services and immersive computing platforms. Founded in 2004 and headquartered in Menlo Park, California, the company operates a family of consumer-facing products and services that connect users, creators and businesses. In October 2021 the company rebranded as Meta to reflect an expanded strategic focus on augmented and virtual reality technologies alongside its social media businesses.

Meta's core consumer products include Facebook, Instagram, WhatsApp and Messenger, which enable social networking, messaging, content sharing and community building across mobile and desktop devices.

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