Investing in Meta Platforms: Opportunities Amid Market Volatility
After last year’s record-breaking run, the start of 2025 reminds investors that risk and price volatility are integral to the investing landscape. The Nasdaq Composite (NASDAQINDEX: ^IXIC) has recently entered correction territory, falling about 14% from its all-time high due to rising concerns over the economic landscape. One notable company caught in this turbulence is Meta Platforms (NASDAQ: META). Although it retains a modest 4% gain year-to-date, shares have decreased around 15% over the past month.
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So, is it the right time to consider buying the dip in Meta Platforms? Here’s what you need to know.
Addressing Market Anxiety
Investor anxiety is understandable during a market correction. The current environment reflects mixed signals about consumer spending, job growth, inflation, interest rates, and even geopolitical tensions. Actions taken by the Trump administration to impose tariffs on imports from trading partners like Canada and Mexico have only added to the uncertainty surrounding their long-term impact.
However, despite shifts in market sentiment, there is no solid evidence indicating that economic conditions are deteriorating or that stocks require further significant sell-offs. Recent events illustrate the persistent “wall of worry” that stocks continuously face. For investors, the best approach during such volatile periods is to maintain a disciplined, long-term focus on investing in high-quality companies with reliable profitability and cash flow.
Meta Platforms exemplifies a company well-positioned to achieve consistent growth. The firm not only remains somewhat insulated from trade policy impacts, but it also benefits from significant global diversification.
Image source: Getty Images.
Promising Outlook for Meta Platforms
The year 2024 was monumental for Meta, showcasing a 22% increase in revenue and a remarkable 61% rise in earnings per share (EPS) for the period ending December 31—an acceleration when compared to 2023. The company’s core advertising business remains robust, and its leadership in artificial intelligence (AI) has emerged as a key growth driver.
Meta leverages its vast user base, estimated at 3.4 billion daily active people across platforms like Instagram and WhatsApp, for enhanced monetization. AI plays a crucial role in this process, optimizing ad targeting and boosting conversions. The company’s AI algorithms not only keep users engaged but also generate new revenue streams. Furthermore, Meta’s open-source AI initiatives, including its Llama large language model, underscore its commitment to innovation.
Wall Street analysts, according to Yahoo! Finance, anticipate continued financial momentum for Meta, projecting a 15% revenue growth this year. The estimated EPS of $25.15 indicates a 5.4% year-over-year growth, supported by substantial investments towards AI advancement. Impressively, Meta’s two-year trend illustrates considerable room for adjusting expenditure plans to enhance profitability.
| Metric | 2024 | 2025 Estimate |
|---|---|---|
| Revenue | $164.5 billion | $188.5 billion |
| Revenue growth (YOY) | 21.9% | 14.6% |
| EPS | $23.86 | $25.15 |
| EPS growth (YOY) | 60.5% | 5.4% |
Data source: Yahoo! Finance.
Meta’s investment appeal further lies in its attractive valuation. Currently trading at a forward price-to-earnings (P/E) ratio of 24 times its consensus EPS for 2025 is below its five-year average of around 27. This suggests that the Stock may represent a bargain, particularly given its high-tech profile that could support a higher valuation.
META PE Ratio (Forward) data by YCharts.
Final Thoughts
I remain optimistic about Meta Platforms, believing the recent market weakness is temporary. The company appears well-positioned for a rebound. Investors might consider dollar-cost averaging as an effective strategy for purchasing shares on dips to minimize near-term risks. Ultimately, Meta is an excellent option for those looking to capture high-level themes in AI through a leading technology firm.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
