5 Reasons Why Meta Platforms Is a Must-Own Stock Right Now

Meta stock surges as digital advertising rebounds—here's why Wall Street can't look away.

Dominant Market Position

Meta's ecosystem captures nearly 3 billion daily active users across its platforms. That's audience scale legacy media giants can only dream of—and advertisers pay premium rates to access it.

AI-Driven Ad Targeting

The company's machine learning algorithms optimize ad performance in real-time, delivering higher ROI for marketers while boosting Meta's bottom line. No human team could match this efficiency.

Reels Monetization Acceleration

Short-form video revenue finally hits inflection point as Reels overtakes competitors in engagement metrics. Another case of Zuckerberg's 'copy and improve' strategy paying dividends.

Cost Discipline Maintained

Year of efficiency measures stick—headcount reductions and infrastructure optimizations flow directly to earnings. Because nothing pleases institutional investors like firing people and cutting costs.

VR/AR Bet Still in Play

Reality Labs losses narrow as Quest adoption grows. The metaverse gamble remains speculative but provides optionality legacy media lacks. Because every tech giant needs a money-losing moonshot to keep things interesting.

Meta trades at multiples traditional media would kill for—proving once again that in tech, narrative often outweighs fundamentals. But when the numbers back the story? That's when even skeptical fund managers open their wallets.

Image source: Getty Images.

1. Dominant platforms

Meta Platforms' social media sites include Facebook, Instagram, Messenger, WhatsApp, and Threads. Those are collectively the most widely used social media apps in the world.

In Q2, Meta's advertising revenue ROSE by an impressive 22%. In Q3, Meta expects its revenue to rise by 20%, indicating further strength. Although Meta has had a dominant run, that run is far from over.

2. AI ads

One of the reasons Meta's revenue is growing so quickly is that it's starting to incorporate artificial intelligence (AI) features into its ad platform. Management noted that its ad conversions have improved since it implemented some of its tools, and users are spending more time on its platforms.

We're just in the early innings of advertising tools with integrated AI, and further advancements could drive significant revenue growth for Meta if they lead to dramatically improved conversion rates.

3. All-star AI team

Meta has attracted some of the brightest minds in AI with nine-figure signing bonuses. With Meta's top-notch talent divided up to work on several AI projects at once, it may be a few years before we see the fruits of their labor. And while there are no guarantees, some major innovations could very well come from this talent pool.

4. Inexpensive growth

Moving to the stock, Meta isn't dramatically overvalued despite its business being at the forefront of the AI investing movement.

META PE Ratio data by YCharts

The stock trades for just a bit over 27 times trailing earnings, which isn't very expensive relative to the broader market. Thetrades for 24.8 times earnings although it tends not to grow nearly as quickly as Meta is. This bodes well for Meta's future, as it shows the company can deliver outsize returns with a reasonable price tag and strong growth rates.

5. Revenue potential

Meta Platforms may be focused on integrating AI with its social media platforms, but it is also developing several other exciting technologies. One of them is its AI glasses, which could be a must-have item if Meta can get the price, FORM factor, and abilities correct.

Its uses could be quite varied. According to one news report, users might be able to look at a sign and automatically translate it into another language. Or it might coach users on how to cook. The possibilities could be endless.

All the projections for Meta's growth and performance over the next few years essentially exclude any contributions from its Reality Labs division. Should one of these products become a must-have device, a massive new revenue stream could emerge and push Meta's stock higher.

Although this is far from certain, start-up-like upside within Meta WOULD be the cherry on top for a solid company, and I think it makes for an excellent stock to buy right now.