Despite a sluggish market on Friday, shares of Meta Platforms (NASDAQ: META) experienced a notable rally, climbing as much as 3.1%. As of 3:03 p.m. ET, the stock was still up 1.9%.
The upward movement of the social media and AI giant was spurred by several significant developments, each from different sources.
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Major Changes on the Horizon
The first development stemmed from a Supreme Court case involving TikTok. Recently, Congress passed a law aimed at banning the platform in the U.S., effective January 19, unless its Chinese parent company sells it. This decision raises national security concerns due to TikTok’s ties with the Chinese government. During oral arguments, Chief Justice John Roberts posed a critical question, hinting at strong support among justices for allowing the law to take effect. A TikTok ban would likely benefit Meta, which competes heavily with the platform.
The second piece of good news came from Wall Street. Analysts at KeyBanc reaffirmed their buy rating on Meta, increasing their 12-month price target for the stock to $700, a 15% increase from Wednesday’s closing price. They emphasized that Meta’s aggressive investments in AI are poised to yield substantial returns in the future.
Lastly, some investors reacted positively to an Axios report indicating that Meta will discontinue its diversity, equity, and inclusion programs. An internal memo suggested that the move aligns with changes in the legal and policy landscape surrounding these initiatives in the U.S.
Investment Outlook for Meta
Meta has proven to be a standout performer on Wall Street, with its stock price soaring 369% over the past two years. This impressive increase makes it the second-best performer among the “Magnificent Seven” stocks, trailing just Nvidia.
Despite this growth, Meta’s current valuation sits at 29 times earnings, which remains attractive considering the company’s ongoing opportunities.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook, is a board member of The Motley Fool. Danny Vena holds positions in Meta Platforms and Nvidia. The Motley Fool recommends and has positions in Meta Platforms and Nvidia and follows a specific disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
