Meta Platforms delivered strong financial results in Q4 2024, with revenue and profit exceeding analysts’ expectations. While this pushed the company’s stock price higher, growth remained moderate due to concerns about substantial investments in AI-based products and sluggish user growth. Investors are increasingly questioning whether such high AI-related spending will yield returns in the future.
This article examines Meta Platforms’ business and revenue streams, analyses the company’s quarterly reports, and conducts a fundamental analysis of META. It also includes experts’ forecasts for Meta’s shares for 2025 and assesses Meta’s stock performance, which serves as the basis for Meta Platforms’ stock forecast for the entire year.
Meta Platforms, formerly known as Facebook, was founded in 2004 by Mark Zuckerberg and his Harvard classmates Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes. It was initially a social network created for Harvard students but soon expanded rapidly, becoming one of the world’s largest communication platforms. Meta’s core operations include the development of social networks such as Facebook, Instagram, and WhatsApp, as well as advancing virtual and augmented reality technologies through its Reality Labs division. The company focuses significantly on developing the metaverse, as reflected in its rebranding in 2021. Meta went public on 18 May 2012, and its IPO ranked among the most prominent tech IPOs in history.
Meta Platforms, Inc.’s main financial flows
Meta Platforms revenue mainly comes from the following sources:
- Advertising: this segment accounts for approximately 98.5% of the company’s total revenue. Meta generates advertising revenue through its platforms (Facebook, Instagram, Messenger, and WhatsApp), allowing advertisers to target audiences based on various criteria, including demographic data, user interests, and behaviour
- Reality Labs: this division generates a smaller portion of the company’s revenue through hardware sales under the Meta Quest (previously Oculus VR) brand and related software products, including content
- Other revenue: this comprises fees charged for using Meta’s payment systems (for example, on Marketplace platforms or apps), paid subscriptions for special features or products, and income from other services. While these sources are less significant than advertising, they still contribute to the company’s financial performance
Thus, Meta Platforms’ primary source of revenue is advertising on its social platforms, followed by income from virtual reality sales and services and additional proceeds from other sources.
Meta Platforms, Inc.’s Q2 2024 report
Meta announced solid financial Q2 2024 results. Below are the figures compared to the same period in 2023:
- Revenue: 39.74 billion USD (+22%)
- Net income: 13.46 billion USD (+73%)
- Earnings per share: 5.16 USD (+73%)
- Operating margin: 38% (+900 basis points)
- Advertising revenue: 38.20 billion USD (+21%)
- Revenue from Reality Labs: 353 million USD (+27%)
- Loss from Reality Labs: 4.50 billion USD (+21%)
- Number of daily active users: 3.27 billion (+7%)
- Costs and expenses: 24.22 billion USD (+7%)
Advertising remains the primary revenue stream, contributing 96% of the company’s total revenue. The Reality Labs division, which specialises in developing virtual and augmented reality (VR and AR) technologies, has only generated losses so far. By the end of Q2 2024 results, Reality Labs’ loss reached 4.50 billion USD, a 21% increase.
Meta Platforms, Inc.’s Q3 2024 report
On 30 October, Meta released its Q3 2023 report. Below are the key figures compared to the same period in 2023:
- Revenue: 40.58 billion USD (+19%)
- Net income: 15.68 billion USD (+35%)
- Earnings per share: 6.03 USD (+37%)
- Operating margin: 43% (+300 basis points)
- Advertising revenue: 39.88 billion USD (+18%)
- Revenue from Reality Labs: 270 million USD (+28%)
- Loss from Reality Labs: 4.40 billion USD (+20%)
- Number of daily active users: 3.279 billion (+5%)
- Costs and expenses: 23.24 billion USD (+14%)
CEO Mark Zuckerberg explained that revenue growth is driven by advancements in artificial intelligence (AI), which are actively integrated into the company’s apps and business processes. He highlighted the significant success of Meta AI, the introduction of the Llama AI model, and the development of AI-enabled glasses.
CFO Susan Li shared the company’s forecast, expecting Q4 2024 revenue to range between 45.00 billion and 48.00 billion USD. She also revised the company’s total expense forecast for 2024, lowering it to the 96.00-98.00 billion USD range, down from the previous estimate of 96.00-99.00 billion USD. Li emphasised that the operating losses of the Reality Labs division, which focuses on virtual and augmented reality (VR and AR), would significantly increase year-over-year due to ongoing development and investments aimed at scaling the ecosystem. Additionally, Li mentioned that Meta expects substantial growth in capital expenditures in 2025, including increased spending on infrastructure.
Both Zuckerberg and Li also noted the growing number of legal and regulatory challenges, particularly in the European Union and the US, which could significantly affect Meta’s business and financial results.
Overall, Meta’s management expressed optimism about the company’s current performance, which is driven by progress in AI technologies and strategic investments. However, they also pointed out that external factors could influence future results.
Meta Platforms, Inc.’s Q4 2024 earnings report
On 29 January 2025, Meta published its earnings report for Q4 2024. Below are the key figures compared to the same period in 2023:
- Revenue: 48.38 billion USD (+21%)
- Net income: 20.83 billion USD (+49%)
- Earnings per share: 8.02 USD (+50%)
- Operating margin: 48% (+700 basis points)
- Advertising revenue: 46.78 billion USD (+20%)
- Revenue from Reality Labs: 1.08 billion USD (+1%)
- Loss from Reality Labs: 4.96 billion USD (+6%)
- Number of daily active users: 3.35 billion (+5%)
- Costs and expenses: 25.02 billion USD (+5%)
In a comment on the report, Zuckerberg highlighted advancements in Artificial Intelligence (AI) and expressed optimism about scaling these technologies in 2025, including the introduction of personalised AI assistants. He emphasised the company’s commitment to building an “extensive computing infrastructure,” which implies significant investments in AI. His vision includes creating AI that can write and deploy code, unlocking new opportunities for business and the market.
Zuckerberg also pointed to progress in the development of computerised glasses, suggesting that 2025 could be a key year for understanding the market potential of AI-powered glasses.
Regarding DeepSeek, he acknowledged the “groundbreaking” developments that Meta is still trying to comprehend, planning to integrate some of these innovations into its products. Despite DeepSeek’s achievements, Zuckerberg stated that “it is too early to form a firm opinion” on how these developments will impact Meta’s infrastructure and capital investment plans. He stressed that the company’s strategy of large-scale AI infrastructure investments will remain unchanged, viewing this as a long-term strategic advantage.
Zuckerberg noted that DeepSeek is a new competitor in this market. At the same time, the decrease in demand for computing resources (GPUs) is by no means certain, as running AI models still requires substantial computing power, especially given the scale of Meta’s operations.
Strengths and weaknesses of Meta Platforms, Inc.
Considering the possibility of investing in Meta Platforms, examining the company’s strengths and weaknesses is essential. Its advantages include the following:
- Monopolistic position in the social networking market: Meta provides services to over 3 billion users, over 40% of the global population. Such a vast audience allows the company to monetise successful projects rapidly
- The Reality Labs project: this is actively developing virtual and augmented reality technologies, and Meta is one of the leaders. Finalising this project will enable the company to quickly monetise the new product, thanks to its extensive user base
- Investments and AI implementation: help advertisers to allocate their budgets more efficiently, which may attract new users to the Meta platform
- Cash and cash equivalents: the company has 58.00 billion USD in reserves, providing a significant margin of safety in challenging times
- Dividends: in 2024, Meta paid dividends to its shareholders for the first time since its IPO. Previously, shareholders had only generated income from stock appreciation, but now they have an additional incentive to retain shares in their portfolio and receive dividend payouts, which may attract new investors
Meta Platforms’ business weaknesses may include the following:
- Weak income diversification: over 90% of Meta’s revenue comes from advertisers, making the company vulnerable to external factors related to the advertising market. For instance, major advertisers boycotted Facebook in 2020, negatively impacting the company’s stock price
- Regulatory pressure and legal issues: Meta Platforms faces antitrust investigations and litigations in various countries. The company is accused of monopolising the social networking market and engaging in anti-competitive practices, which increases risks and may lead to substantial fines or forced changes in the business model
- Increased competition: Meta faces intense competition from other social platforms, including Snapchat, TikTok, and Twitter. These companies are actively developing their innovative features and successfully expanding their younger audience, which could make the Meta platform less attractive and impede user retention
- Reliance on Alphabet and Apple: Meta’s apps are widely installed on devices running Android and iOS operating systems, making the company reliant on these tech giants. Restrictions on user data access by Alphabet (NASDAQ: Google) and Apple (NASDAQ: AAPL) may significantly impair Meta’s position, reducing its ability to target ads efficiently and monetise its audience
- Innovations and research: implementing ambitious VR and AR projects requires significant investments and time. These projects may ultimately be loss-making and negatively impact the company’s financial position
Although Meta’s weaknesses are substantial, Zuckerberg must be acknowledged for effectively managing the company’s challenges. Having already faced some of these issues, he can apply the experience gained to future scenarios.
Expert forecasts for Meta Platforms, Inc. stock for 2025
- Barchart: 45 out of 53 analysts rated Meta Platforms’ stock as Strong Buy, two as Buy, four as Hold, and two as Strong Sell. The target price for the upside is 811 USD; for the downside, it is 475 USD
- MarketBeat: 37 out of 44 experts rated the stock as Buy, five gave a Hold recommendation, and two rated it as Sell. The target price for the upside is 811 USD; for the downside, it is 360 USD
- TipRanks: 40 out of 44 surveyed gave the stock a Buy rating, three recommended Hold, and one rated it as Sell. The target price for the upside is 875 USD; for the downside, it is 530 USD
- Stock Analysis: 22 out of 48 experts rated the stock as Strong Buy, 21 as Buy, three as Hold, and two as Sell. The target price for the upside is 875 USD; for the downside, it is 360 USD
Meta Platforms, Inc.’s stock price forecast for 2025
On the weekly timeframe, Meta Platforms’ stock is trading within an ascending channel and has reached its upper line, which serves as resistance. A divergence has developed on the MACD indicator, signalling a potential price decline. Based on the current Meta Platforms stock dynamics, the possible price movements for 2025 are as follows:
The primary Meta Platforms stock forecast suggests a corrective decline to the nearest support level at 540 USD. A rebound from this level would indicate that the correction has ended and price growth has resumed. The target for this upward movement would be 760 USD, determined using Fibonacci levels. If the price continues to rise, the next target would be 875 USD, as forecasted by experts.
An alternative Meta Platforms stock forecast scenario predicts a breakout above the upper line of the channel, followed by a price increase to 875 USD. In this scenario, volatility in the stock would significantly increase, allowing the price to reach the specified target easily.
Meta Platforms, Inc. stock analysis and forecast for 2025
Risks of investing in Meta Platforms, Inc.
The following factors could negatively affect Meta Platforms’ revenue and stock value:
- Regulation and legislation: the tightening of regulations in privacy and antitrust, particularly in the EU and the US, could limit Meta’s ability to collect and utilise data for targeted advertising
- Changes to privacy policy: updates to privacy policies, such as Apple’s iOS updates that allow users to opt out of tracking, have significantly impacted the effectiveness of targeted advertising. Future changes like these could reduce advertising revenues
- Competition: the emergence of new competitors or advancements by existing ones in social media, advertising, and AI-based products could lead to a loss of advertisers. Meta’s market share may decrease if competitors offer more attractive platforms or solutions
- Economic instability: macroeconomic factors, including recession and economic downturn, could reduce advertising expenditures by businesses, directly affecting Meta’s main source of revenue
- Innovation costs: significant investments in innovative technologies (AI and metaverse development) could increase operating expenses without proportional growth in current revenues, negatively impacting the company’s short-term profitability
Summary
Meta’s Q4 2024 report demonstrates robust growth in key financial metrics, reinforcing the company’s strong position in digital advertising and technological innovation. Revenue surpassed analysts’ expectations, underscoring the effectiveness of Meta Platforms, Inc.’s advertising products.
Infrastructure and technology development investments remain a priority for Meta, as reflected in substantial capital expenditures and a 10% increase in its workforce during Q4 2024. However, the company’s considerable debt and rising costs necessitate careful financial management to ensure long-term profitability.
Although investor reactions to the report were initially positive, Meta’s shares declined by the close of trading, suggesting limited demand for the stock above 700 USD. This points to the possibility of either a price correction or some time needed for market participants to adjust to the current levels, with the stock now trading at an all-time high.
A TikTok ban in the US could potentially boost Meta’s business. This ban could trigger a sharp rise in stock value and a subsequent influx of new users, increasing its advertising revenues.
Source: Roboforex
