Meta Platforms’ stock (META) is down over 20% from recent highs, facing a setback amid fear of too much AI spending by the company. This recent decline signals renewed worries regarding slowing user growth and substantial investments in artificial intelligence and reality labs. However, some experts are still calling META a buy, suggesting now is the time to buy the stock as it’s dipping.
While a poor tech stock market has sent shares down in the last 30 days, the company has seen strong growth powered by its AI investments. Therefore, now may present a decent buying opportunity. Analysts at Freedom Capital Markets recently upgraded their price forecast for Meta Platforms’ stock, suggesting the tech giant’s shares will boom. Analyst Saken Ismailov has upgraded Meta from Hold to Buy and set a price target of $800. Wolfe Research, Guggenheim, and TD Cowen all maintain high price targets as well, indicating strong growth potential.
Furthermore, while worry about Meta’s spending is understandable in light of its metaverse failures, Meta’s AI spending has been paying off. The company is using its Llama models to improve its content recommendation algorithms, which keeps users on its apps longer and leads to more ads being served per user. At the same time, it’s also using AI to help advertising create better campaigns and improve targeting. This has helped to propel strong growth at Meta, making its stock a valuable one to keep an eye on.
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META stock is currently trading in the middle of its 52-week range and below its 200-day simple moving average. The stock is currently trading at a P/E multiple of 25.9 and a P/EBIT multiple of 17.8. It has also provided a median return of 74.5% within a year following sharp declines since 2010. CNN analysts are also bullish, with the majority of analysts surveyed calling META a buy. The platform has a median price forecast for META of $850.00 over the next 12 months, while keeping a higher best-case scenario projection of $1,117.00. The latter would imply an ROI of over 81% from current stock prices.