Neil Patel, The Motley Fool
4 min read
In This Article:
-
Meta plans to invest nearly $70 billion this year to bolster its AI-related infrastructure to better serve users and ad customers.
-
The business has grown earnings per share at a rapid clip in recent years, but this pace will likely slow down.
-
The valuation isn’t expensive for a company this wonderful.
Meta Platforms (NASDAQ: META) continues to be a monster winner for investors. Shares are up 42% in the past 12 months (as of June 6) thanks to strong financial results that keep impressing the market.
If you're a new investor in this dominant social media enterprise, you're certainly looking at what the future holds. Maybe the good times won't end anytime soon. Where will Meta Platforms stock be in one year?
The most notable theme in recent memory is just how much companies are focused on artificial intelligence (AI). Meta is no different. It's one of the top businesses in the space already.
Meta launched Meta AI, a chatbot assistant across its apps, in April 2024. It can answer questions from users and also create content and generate photos. "Across our apps, there are now almost a billion monthly actives using Meta AI," founder and CEO Mark Zuckerberg said on the first-quarter 2025 earnings call.
The company is also operating in the hardware space, with the Ray-Ban smart glasses, which are integrated with the Meta AI assistant. Monthly active users are up more than fourfold in the past year.
Of course, Meta generates virtually all of its revenue from digital ad efforts. It's already leveraging AI to better serve these customers, and Zuckerberg provided a clear intent looking ahead:
"Our goal is to make it so that any business can basically tell us what objective they're trying to achieve -- like selling something or getting a new customer -- and how much they're willing to pay for each result, and then we just do the rest," he said.
Therefore, from a purely competitive standpoint, I don't think anyone would disagree that Meta will be in a stronger position a year from now. This perspective is bolstered by the fact that the leadership team plans to spend $68 billion on capital expenditures (capex) just in 2025.
One key factor that can drive stock performance is rising earnings per share (EPS). In the past five years, Meta's EPS grew at a compound annual rate of 30.3%. And according to Wall Street consensus analyst estimates, this critical metric is projected to increase at an annualized pace of 11.2% between 2024 and 2027.
