Meta Platforms, Inc. (META) is a leading social media giant known for its popular applications like Facebook, WhatsApp, and Instagram. The company’s stock has seen impressive growth this year, largely driven by its emphasis on artificial intelligence (AI). Now, it’s worth examining whether it’s a good time to hold onto Meta investments.
Meta Stock Hits 20 Straight Days of Gains
Remarkably, Meta stock has not closed in the negative during any trading session in February, achieving 20 consecutive days of gains as of Friday. This year, the stock has experienced just five down days, with none since Donald Trump took office as the 47th U.S. President.
So far in 2023, Meta has outperformed its peers in the “magnificent seven” stocks, climbing 25.8%. On Friday, it reached an all-time high of $736.67, representing a 600% increase from its 2022 low, coinciding with the Federal Reserve’s rate hikes aimed at controlling inflation at 40-year highs.
Massive Investment in AI
Meta’s strong commitment to the rapidly growing AI sector has boosted investor confidence and continues to drive its stock price upwards. CEO Mark Zuckerberg recently announced plans to invest between $60 billion and $65 billion into AI infrastructure, positioning Meta to compete with major players like Microsoft Corporation (MSFT), its partner OpenAI, and Alphabet Inc. (GOOGL).
The company aims to develop AI-driven humanoid robots for various tasks, while Zuckerberg predicts that Llama 4 will become the most popular advanced large language model (LLM) this year. Additionally, Meta’s personalized AI assistant, Meta AI, is set to serve one billion users in 2023, supported by a new 2-gigawatt data center being constructed in Louisiana.
Meta is also amongst the top purchasers of NVIDIA Corporation‘s (NVDA) chips and aims to have 1.3 million graphics processing units by year-end. The company is ramping up its AI development by replacing underperforming staff and acquiring top talent to lead its AI innovations.
Should You Keep Meta Stock?
Meta’s AI projects, particularly Llama 4, indicate a strong potential for long-term growth due to their ability to address complex user challenges. The company’s AI engineering agent could rival the output of a mid-level engineer, representing a significant advancement that might energize the stock price. With over 3.3 billion active users spanning its apps, Meta holds a competitive edge that creates a barrier for potential rivals, suggesting strong future stock performance.
Analysts expect Meta shares to continue rising, as the average short-term price target has increased to $743.55, up from its last close of $736.67, with the highest prediction reaching $935—implying a potential upside of 26.9%.
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For investors, holding onto Meta stock seems wise, given its growth prospects and reliable dividend payments. The company currently offers a dividend yield of 0.27%, with a payout ratio of just 8% of earnings. For a deeper look into Meta’s dividend history, click here.
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Meta currently holds a Zacks Rank of #3 (Hold). You can find a list of stocks ranked #1 (Strong Buy) here.
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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.
