Meta Platforms Reaches New Heights: What Investors Need to Know

Facebook’s parent company, Meta Platforms META, has reached a significant milestone as its stock price surged to an all-time high after an incredible 20 consecutive days of gains. Since the beginning of the year, META has risen 25.8%, and it has skyrocketed 600% from its low in 2022. This impressive performance makes Meta the leading company in this year’s “Magnificent Seven” tech group.

In light of these bullish trends, investors looking for growth opportunities should consider ETFs with substantial investments in Meta. Some noteworthy options include iShares Global Comm Services ETF IXP, Fidelity MSCI Communication Services Index ETF FCOM, Vanguard Communication Services ETF VOX, Communication Services Select Sector SPDR Fund XLC, and First Trust Dow Jones Internet Index Fund FDN.

Several factors are driving META’s strong performance and are expected to continue this year:

Key Drivers Behind Meta’s Success

Investments in Artificial Intelligence: Meta plans to spend between $60 billion and $65 billion on AI infrastructure by 2025. CEO Mark Zuckerberg has stated that 2025 will be the year a highly intelligent and personalized AI assistant reaches over a billion people, with the goal of Meta AI being a leading player in this space. Additionally, Meta is developing AI-powered humanoid robots, forming a new team within its Reality Labs division to focus on this project.

Expansion into AI Hardware: Reports suggest that Meta is in talks to acquire South Korean chip startup FuriosaAI, which would enhance its AI hardware capabilities. This acquisition may help Meta rely less on NVIDIA (NVDA), a leading chip manufacturer, while also expanding the use of its in-house MTIA chips.

Advertising Dominance: Meta’s advertising business remains robust, supporting its moves into AI and virtual reality. As of now, Meta ranks second globally in digital advertising revenue, following Alphabet GOOGL.

Bullish Analysts: Wall Street is optimistic about Meta, with a current analyst recommendation score of 1.37 on a scale of 1 to 5 (from Strong Buy to Strong Sell) from 53 brokerage firms. Among those, 45 rate it as Strong Buy. The average price target from these analysts is $738.08, with predictions ranging from $505.00 to $900.00.

Cheap Valuation: Currently, META’s stock is trading at 27.63X forward earnings. This figure stands below the Zacks Internet-Software industry average of 29.86X, making it one of the more affordable large tech stocks available.

ETFs to Consider

iShares Global Comm Services ETF (IXP)
This ETF provides global exposure to companies in media and communication, tracking the S&P Global 1200 Communication Services Index. Meta Platforms holds the top position in this ETF at 24.9%. The fund has approximately $439.3 million in assets and trades an average of 17,000 shares daily, with an expense ratio of 0.41%. IXP has a Zacks ETF Rank #3 and a Medium risk rating.

Fidelity MSCI Communication Services Index ETF (FCOM)
Following the MSCI USA IMI Communication Services Index, this ETF includes 109 stocks, with Meta Platforms at 24.7%. FCOM has about $1.5 billion in assets and trades 164,000 shares daily, charging 8 basis points in annual fees. It also has a Zacks ETF Rank #3 with a Medium risk rating.

Vanguard Communication Services ETF (VOX)
Targeting the communication sector, this ETF tracks the MSCI US Investable Market Communication Services Index and holds 117 stocks, with a 22.6% stake in Meta. VOX has $4.9 billion in assets and trades an average of 184,000 shares daily, charging 9 basis points in annual fees. Its Zacks ETF Rank is #3, with a Medium risk outlook.

Communication Services Select Sector SPDR Fund (XLC)
XLC exposes investors to companies in telecommunications and media, holding $22.4 billion in assets. It includes 22 stocks, with Meta representing 21.4%. This fund charges 8 basis points in annual fees and has an average daily volume of 4.5 million shares, earning a Zacks ETF Rank of #1.

First Trust Dow Jones Internet Index Fund (FDN)
Following the Dow Jones Internet Composite Index, this ETF includes around 40 stocks and features Meta at 11.3%. FDN is the most popular ETF in the tech space, boasting $7.4 billion in assets and an average daily volume of 398,000 shares. It charges 51 basis points annually and holds a Zacks ETF Rank of #1.

Stay Informed on Key ETF Developments

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Alphabet Inc. (GOOGL): Free Stock Analysis Report

First Trust Dow Jones Internet ETF (FDN): ETF Research Reports

Vanguard Communication Services ETF (VOX): ETF Research Reports

Fidelity MSCI Communication Services Index ETF (FCOM): ETF Research Reports

iShares Global Comm Services ETF (IXP): ETF Research Reports

Communication Services Select Sector SPDR ETF (XLC): ETF Research Reports

Meta Platforms, Inc. (META): Free Stock Analysis Report

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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.