Meta Pulls Ahead of the Mag 7: Analysts Predict a Breakout Year

Key Points

• Meta Platforms has separated from its Magnificent Seven peers in 2025, claiming the best performance so far by a solid margin. 
• With shares approaching all-time highs, several analyst updates indicate further room to run.
• Meta's AI implementations have yielded strong results; analysts believe this can continue.

Among the almighty Magnificent Seven stocks, Meta Platforms NASDAQ: META is now the undisputed front-runner when it comes to performance so far in 2025. As of the June 9 close, Meta has provided a total return of just under 19%.

Coming in at second place is Microsoft NASDAQ: MSFT, with its return of just under 13%. The two names jockeyed back and forth for much of April and May for the top position, but Meta has pulled away in June.

Meta is now only around 6% off from the all-time closing high it reached in mid-February.

Despite this, Wall Street analysts continue to upgrade or reiterate bullish views on the stock. So, what do these updates suggest about the trajectory of Meta shares, and what is the reasoning behind their bullish outlooks?

Price Targets Indicate New Highs for Meta, Loop’s $888 Target Stands Out

Some of the most notable upgrades come from Loop Capital and JPMorgan. Loop’s upgrade came on May 16, with a price target of $888. JPMorgan’s $735 target update came on June 4. Citizens JMP Securities also reiterated its $750 target on June 9. Overall, the average of these targets comes in at $791. This figure suggests the stock could substantially surpass its all-time high closing price of approximately $736. It also implies solid upside in shares of approximately 14% from their June 9 closing price. Still, this average price target is largely buoyed by Loop’s particularly bullish view, making it a logical place to start.

Loop’s bullishness comes from several sources. First, expectations for lowered revenue growth due to reduced Chinese ad spending “did not materialize" in Q1. Many thought that the ending of tariff exemptions for Temu and Shein would significantly reduce their ad spending at Meta. In its Q1 2025 earnings call, Meta noted that there was some reduced spending in the United States from Asian e-commerce exporters in Q1. However, the redirection of spending to other geographies helped make the overall impact relatively minor.

Furthermore, Loop calls Meta a “prime example” of a non-hardware company benefiting from AI. Loop has confidence that Meta stock will outperform its Magnificent Seven peers in 2025. Loop increased its forward price-to-earnings (P/E) estimates on Meta to 30x. This implies a moderate expansion from the stock’s current 27.5x forward P/E.

How Meta’s Social Graph Drives Network Effects and Growth

JPMorgan pointed out several strengths at Meta that "contribute to its potential as a long-term blue-chip company." They say the company’s wide reach and high engagement drive network effects, helping strengthen Meta’s position in the “social graph.” With over 3.4 billion people using its apps, the value of using Meta’s apps is already massive, but it increases further as more users join. The added content that those new users contribute benefits existing users, increasing the value to all.

It helps Meta dominate the social graph, which maps how a user connects to others on a social media platform. By analyzing who a user follows and the content they engage with, Meta can recommend additional content they are likely to enjoy. That includes targeted advertisements, which are central to Meta’s business model. The company’s effectiveness in recommending ads attracts advertisers to its platforms, and this advantage is expected to grow as its network effects continue to strengthen. JPMorgan also believes that Meta’s increasing investment in AI will lead to strong sales and earnings growth, as it has in the past.

Citizens JMP Securities' bullishness stems from strong data surrounding Meta’s AI-generated ad creation tools. Advertisements using these tools saw significant increases in user engagement and substantial conversion rate improvements compared to ad campaigns that didn’t use them. Other tools also helped significantly decrease advertisers' costs per customer acquisition. All of this is evidence that Meta’s investments in these tools are paying off and increasing the value to marketers of advertising on Meta. This data bodes well for Meta’s ambitions to allow for fully automated ad campaigns by the end of 2026.

Meta’s AI Strength Grows Increasingly Evident, Tariff Uncertainty Remains

Overall, many analysts continue to see Meta in a favorable light. As further evidence of Meta’s AI strategy succeeding emerges, analyst confidence is growing. Still, Meta is likely not yet out of the water when it comes to tariffs, somewhat undermining Loop’s positive take. Meta's Q2 results should provide a better indication of how well its business model handles changes in global trade policy.