Meta Platforms, currently valued at approximately $1.6 trillion, is focused on enhancing its advertising business through artificial intelligence (AI) innovations like Advantage+, which enables automated ad campaigns. As of February 25, 2024, Meta’s Advantage+ has achieved a $60 billion annual revenue run rate, while its video generation tools have reached $10 billion, growing more than three times the revenue increase from overall ad sales in the previous quarter.
In 2024, Meta plans to significantly increase capital expenditures, potentially spending up to $135 billion, highlighting its commitment to AI development. Despite skepticism regarding rising infrastructure costs affecting free cash flow, analysts project a consensus earnings per share (EPS) of $29.60 for this year, with expectations for growth of 16% by 2027. To reach a $3 trillion valuation in the next couple of years, Meta will need to substantially increase its forward price-to-earnings (P/E) multiple, which currently stands at 21.
