Meta Platforms (NASDAQ:META) Stock Price Up 2% - Still a Buy?

Key Points

• Meta shares rose 2% to $624.52 on elevated trading volume, supported by optimism around its AI strategy and relative strength versus other social-media stocks.
• AMD plans to invest $1 billion in Meta and co-develop AI chips, while strong advertising trends and better-than-expected quarterly results continue to support the business. Analysts maintain a “Moderate Buy” consensus with an average price target of $833.12.
• Major risks include Meta’s roughly $98 billion AI financing plan, heavy capital expenditures and negative free cash flow, which could create dilution and limit shareholder returns; legal, regulatory and political scrutiny also remain concerns.

Shares of Meta Platforms, Inc. (NASDAQ:META - Get Free Report) rose 2% during trading on Thursday. The company traded as high as $634.68 and last traded at $624.52. Approximately 30,886,416 shares traded hands during trading, an increase of 71% from the average daily volume of 18,042,857 shares. The stock had previously closed at $612.49.

Meta Platforms News Summary

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

• Positive Sentiment: AMD partnership strengthens Meta’s AI build-out. Advanced Micro Devices plans to invest $1 billion in Meta’s equity offering, while the companies will co-design multiple generations of AI chips for Meta’s gigawatt-scale data centers. The agreement could improve hardware diversification, efficiency and long-term supply-chain security. Advanced Micro Devices' Meta Platforms Partnership Goes Beyond a $1 Billion Investment
• Positive Sentiment: Advertising fundamentals remain supportive. Recent coverage points to higher ad pricing, rising impressions and AI-driven improvements in ad conversions and Reels engagement. Analysts also remain constructive, with Daiwa raising its price target to $779 from $687. Daiwa Securities Adjusts Price Target on Meta Platforms
• Positive Sentiment: Meta outperformed weaker social-media peers. Shares showed relative strength as investors grew cautious about Reddit, Snap and Pinterest, while Alphabet’s selloff highlighted concerns about AI spending that did not immediately undermine Meta’s stock. Social-Media Stocks Market Coverage
• Neutral Sentiment: Political activity could create reputational or regulatory risk. A Zuckerberg-backed super PAC contributed nearly $1 million to Xavier Becerra’s California gubernatorial campaign, potentially drawing additional scrutiny to Meta’s political influence and spending. Meta Super PAC California Campaign Contribution
• Negative Sentiment: Funding and spending remain the main overhangs. Meta’s roughly $98 billion financing plan for AI infrastructure raises dilution concerns, while elevated capital expenditures have pushed free cash flow negative and could limit buybacks and dividend growth. Additional legal exposure from youth-safety litigation and uncertainty surrounding Muse’s costs add risk. Meta Reports Negative Free Cash Flow

Analyst Upgrades and Downgrades

A number of research firms have issued reports on META. Robert W. Baird cut their price target on Meta Platforms from $830.00 to $750.00 and set an "outperform" rating for the company in a research note on Thursday, July 30th. Rothschild & Co Redburn lifted their target price on shares of Meta Platforms from $900.00 to $1,000.00 and gave the stock a "buy" rating in a research report on Tuesday, July 21st. Jefferies Financial Group raised their price target on shares of Meta Platforms from $710.00 to $875.00 and gave the stock a "buy" rating in a research note on Tuesday, September 22nd. Phillip Securities raised shares of Meta Platforms from a "buy" rating to a "strong-buy" rating and lowered their target price for the company from $795.00 to $750.00 in a report on Monday, August 3rd. Finally, DA Davidson lifted their price target on Meta Platforms from $700.00 to $800.00 and gave the company a "buy" rating in a research report on Thursday, October 22nd. Three equities research analysts have rated the stock with a Strong Buy rating, forty-seven have given a Buy rating and eight have given a Hold rating to the company's stock. According to data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus price target of $833.12.

Meta Platforms Stock Performance

The company has a quick ratio of 1.90, a current ratio of 1.90 and a debt-to-equity ratio of 0.30. The stock has a market cap of $1.59 trillion, a P/E ratio of 21.30, a price-to-earnings-growth ratio of 1.12 and a beta of 1.19. The business has a 50 day moving average price of $667.08 and a two-hundred day moving average price of $632.53.

Meta Platforms (NASDAQ:META - Get Free Report) last announced its earnings results on Thursday, October 22nd. The social networking company reported $7.40 EPS for the quarter, topping analysts' consensus estimates of $6.54 by $0.86. Meta Platforms had a return on equity of 30.73% and a net margin of 31.15%. The firm had revenue of $64.60 billion during the quarter, compared to analysts' expectations of $63.34 billion. During the same quarter in the previous year, the business earned $7.25 EPS. The company's quarterly revenue was up 26.1% on a year-over-year basis. On average, sell-side analysts forecast that Meta Platforms, Inc. will post 28.98 earnings per share for the current fiscal year.

Meta Platforms Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Monday, September 28th. Investors of record on Monday, September 21st were given a dividend of $0.5250 per share. The ex-dividend date was Monday, September 21st. This represents a $2.10 dividend on an annualized basis and a yield of 0.3%. Meta Platforms's payout ratio is currently 7.16%.

Insider Buying and Selling at Meta Platforms

In other news, CAO Aaron Anderson sold 3,240 shares of the stock in a transaction dated Thursday, September 3rd. The shares were sold at an average price of $618.06, for a total value of $2,002,514.40. Following the completion of the sale, the chief accounting officer directly owned 6,271 shares in the company, valued at $3,875,854.26. This represents a 34.07% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Andrew Bosworth sold 7,848 shares of the stock in a transaction that occurred on Tuesday, August 18th. The shares were sold at an average price of $558.00, for a total transaction of $4,379,184.00. Following the completion of the sale, the chief technology officer directly owned 828 shares of the company's stock, valued at approximately $462,024. This trade represents a 90.46% decrease in their position. 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. Over the last quarter, insiders sold 150,015 shares of company stock worth $102,464,300. 13.53% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Meta Platforms

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. Horizons Wealth Management purchased a new stake in shares of Meta Platforms in the 3rd quarter worth approximately $33,000. Advantage Trust Co bought a new stake in Meta Platforms during the second quarter valued at about $28,000. Philadelphia Investment Partners LLC purchased a new position in Meta Platforms in the second quarter valued at about $32,000. Axiom Investment Management LLC purchased a new position in Meta Platforms in the first quarter valued at about $36,000. Finally, Schuylkill Financial LLC bought a new position in Meta Platforms in the second quarter worth about $36,000. 79.91% of the stock is owned by hedge funds and other institutional investors.

Meta Platforms Company Profile

Meta Platforms, Inc is a technology company that develops social networking, messaging, virtual and augmented reality, and artificial intelligence products. The company's principal platforms include Facebook, Instagram, Messenger, WhatsApp, and Threads, which enable users to connect, communicate, share content, and discover products and services.

Meta also operates Reality Labs, its division focused on virtual, augmented, and mixed reality technologies. Reality Labs develops products such as Meta Quest virtual reality headsets and related software and experiences, along with research and hardware intended to support immersive computing.

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