For many investors, tracking the fluctuations in a stock’s price is crucial. This information not only influences investment portfolios but also helps in comparing outcomes across various sectors and industries. The phenomenon known as FOMO, or the fear of missing out, particularly impacts interest in leading tech companies and well-known consumer brands.
Have you ever wondered what your investment would look like if you had purchased shares in Meta Platforms (META) a decade ago? While maintaining that investment may have posed challenges, it’s worth exploring the value of that investment today.
Understanding Meta Platforms’ Business Model
Let’s dive deeper into what drives Meta Platforms’ business.
Meta Platforms holds the title of the largest social media company in the world. Initially revolving around the Facebook app, the company’s offerings expanded to include popular platforms like Instagram and WhatsApp through smart acquisitions. Together with the in-house Messenger app, these services currently reach approximately 3.24 billion users daily as of March 31, 2024.
Based in Menlo Park, California, Meta reported revenues of $134.9 billion in 2023, with a staggering 97.8% of that sum coming from advertising. Marketers utilize ads visible on multiple platforms including Meta, Instagram, Messenger, and various external applications and websites.
Meta’s vast user base has enabled it to carve out a significant niche in the advertising market, where competition stands strong against major players like Google, Twitter, Amazon, and Snap.
The company faces challenges from Apple (in messaging), YouTube (advertising and video), Bytedance (social media), and Tencent (messaging and social media).
The core Meta application facilitates social connection, content sharing, and communication on mobile devices, promoting user engagement through a tailored News Feed that prioritizes personalized stories and ads.
Instagram serves as a platform for photo, video, and message sharing, allowing users to explore personal interests. It also includes features for expressing individuality through posts and direct messages.
Messenger connects users with friends, family, groups, and businesses, whilst WhatsApp provides secure messaging for individuals and organizations worldwide.
Moreover, Meta is venturing into virtual reality (VR) solutions through its Oculus division.
The Investment Outlook
Investing can be open to anyone, yet crafting a successful portfolio requires research, patience, and a degree of risk-taking. If you placed your trust in Meta Platforms a decade ago, you might feel pleased with your decision today.
Calculations indicate that a $1,000 investment made in October 2014 is projected to be worth $7,941.48 by October 17, 2024, marking a remarkable 694.15% gain. It’s essential to note that this figure reflects price appreciation only and does not account for dividends.
In comparison, the S&P 500 appreciated by 213.65%, while gold prices rose by 107.71% during the same period.
Looking to the future, analysts predict further growth for META. The company enjoys steady user growth across various regions, particularly in Asia Pacific. Increased user engagement on platforms like Instagram, WhatsApp, Messenger, and Facebook drives expansion. Leveraging advancements in artificial intelligence (AI) is enhancing the effectiveness of these services, which collectively serve over 3.2 billion users each day. In the U.S., growth remains robust, with WhatsApp surpassing 100 million monthly users and Threads nearing a milestone of 200 million. Year-over-year growth has also been observed across Facebook, Instagram, and Threads. Moving forward, Meta plans to significantly boost investments in developing advanced AI models and services, though monetizing these innovations may take time, posing potential concerns.
Over the last month, META shares rose by 7.22%. Additionally, three earnings estimates for fiscal year 2024 have been revised upward within the past two months, indicating a positive trend.
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The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of Nasdaq, Inc.
