Shares of Meta Platforms (NASDAQ: META) soared last year as the “Magnificent Seven” stock cracked the trillion-dollar mark once again.
Like other tech stocks, Meta Platforms jumped on the broader AI boom as it experienced a resurgence in advertising revenue and moved past its earlier metaverse misstep.
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According to data from S&P Global Market Intelligence, the stock jumped 65% last month. As you can see from the chart below, the stock jumped early in the year on a strong earnings report, and though it swung up and down, the general trajectory was up, in line with the gains in the S&P 500.
Meta flexes its muscles again
Meta stock plunged through 2022 as the advertising market slowed down and the company poured billions into its metaverse project. But the stock continued its successful recovery in 2024. Meta reported strong financial results and gained traction in its AI efforts, saying that it expected Meta AI to be the most used AI chatbot by the end of the year.
The stock’s best day of the year came after it reported 2023 fourth-quarter earnings in February. It jumped 20% on Feb. 2 and also initiated a dividend, rewarding shareholders without a need to sell the stock. In the quarter, Meta reported 25% revenue growth to $40.1 billion. Operating margin more than doubled to 41% as it benefited from earlier cost cuts and layoffs. Additionally, its income tax rate fell, leading to net income tripling to $14 billion, or $5.33 per share, showing its profit potential.
Over the first three quarters of 2024, Meta continued to deliver strong growth as advertising demand remained strong and the company continued to grow its massive user base thanks to continued interest in its products, which include Facebook, Instagram, Messenger, and WhatsApp.
Through the first three quarters of 2024, revenue was up 22.5% while earnings per share have increased 66%.
Image source: Getty Images.
Can Meta keep climbing in 2025?
Looking ahead to the new year, Meta looks positioned for further growth as momentum in digital advertising and AI remains strong. Investors will get a peek at the all-important holiday-quarter results on Jan. 29.
There is room for the stock to go higher this year as it still trades at a reasonable valuation with a price-to-earnings (P/E) ratio of 29. The company won’t have the same margin springboard it benefited from in 2024 , but it should deliver another year of growth for investors.
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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. Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.