Meta Platforms (META) Achieves 70% Surge in 2024, Outshining S&P 500 with AI-Fueled Growth
Meta Platforms (META) delivered an impressive 70% stock surge in 2024, vastly outperforming the S&P 500’s 24% gain, as the tech giant successfully restored investor confidence and bolstered profitability. This remarkable achievement came on the heels of a strategic restructuring effort that streamlined operations and honed in on artificial intelligence (AI) integration, marking a significant turning point in Meta’s business model. The company’s success was not only driven by AI advancements but also by its decision to raise dividends, offering further appeal to investors.
The company’s Q3 2024 earnings report exceeded Wall Street’s expectations, with Meta posting a 19% increase in revenue, reaching $40.6 billion, and a 37% rise in earnings per share (EPS), which stood at $6.03. Although the growth in Family DAP (Daily Active People) was slightly below analyst forecasts, it still demonstrated a year-over-year increase, showcasing Meta’s continued market dominance and growing user base globally.
To bolster investor confidence further, Meta has raised its capital expenditure (capex) guidance for 2025 from $38 billion to $40 billion. This increase comes as Meta ramps up its investment in AI technologies, signaling a long-term strategy aimed at capitalizing on new opportunities within AI and expanding its presence in the market. The company’s focus on AI in advertising tools and its expansion efforts in the XR (extended reality) sector are poised to contribute to its growth trajectory in 2025.
While analysts remain largely optimistic about Meta’s future performance, there are some concerns about Nvidia, with some analysts setting their price targets for the company well above market averages. Nevertheless, analyst Andrew Boone of JMP Securities raised his price target for Meta to $750 from $660, citing the company’s successful AI integration and its ongoing efforts in the XR space. This bullish outlook suggests that 2025 could be a transformative year for Meta, positioning it for continued success.
Meta’s stellar 2024 performance reflects the company’s ability to adapt and innovate, with a clear focus on AI as a key driver of its future growth. The upcoming year holds significant potential for the social media giant, with an increasing emphasis on technology investments and a commitment to returning value to shareholders.
