Social media giant Facebook Inc (NASDAQ:FB) has seen its share price rise more than 400% over the past five years. The company went from being a small social website to an advertising giant with several innovative projects in its pipeline in just half a decade.
While Facebook stock may seem to be nearing its peak, investors who haven’t already should consider adding FB stock to their portfolio, because the firm isn’t done delivering.
While Facebook stock is unlikely to deliver triple-digit returns any time soon, the company is well positioned to outperform the market as well as its peers in the years to come.
An Eye on the Future at Facebook
What makes Facebook stock a solid investment option is the company’s resilience and malleability. A few years ago, many were predicting a doomsday for Facebook as the site lost some of its clout among the younger generation. However, the social media mogul created Instagram, which has become a wildly popular photo-sharing service that is estimated to be worth between $25 billion and $35 billion on its own.
Now, with video streaming becoming more and more popular, Facebook has begun to build out a library of original content that will resonate with the all-important millennial generation.
The firm recently inked deals with media heavyweights like BuzzFeed and Vox Media to beef up its original content library. FB is planning to offer short scripted shows on its platform, a move that will put the company in direct competition with streaming sites like Netflix, Inc. (NASDAQ:NFLX) and Alphabet Inc’s (NASDAQ:GOOGL, NASDAQ:GOOG) YouTube.
Not only will the video content help to draw-in new users and further engage current members, but it will give Facebook yet another way to sell advertising space.
One of the big problems FB stock was facing was the fact that its site was already saturated with ads. Facebook couldn’t add any more advertisements to people’s newsfeeds without compromising the user experience. However, adding more video content offers a new advertising opportunity that will keep FB’s bottom line expanding and propel the Facebook stock price higher in years to come.
Communication Is Key for FB Stock
Facebook has also been able to capitalize on the shift toward messaging rather than calling by creating some of the most popular messaging platforms on the planet. Facebook currently owns the two most popular messaging services in the world — WhatsApp and Facebook Messenger. Not only does that help Facebook continue to grow its ecosystem, but it also allows for creative advertising opportunities.
There has been a lot of chatter about how FB will turn those services into moneymakers and while a clear path hasn’t been set out, the firm is unlikely to let those opportunities go to waste.
Time Will Tell for Facebook Stock
Facebook stock has proven itself as the most reliable social media play on the market. While the industry has shifted dramatically since its inception, Facebook has been one of the only firms with staying power. Companies like Twitter Inc (NYSE:TWTR) are struggling to remain relevant and new entrants like Snap Inc (NYSE:SNAP) have a questionable future. Facebook, on the other hand, has been able to keep its finger on the pulse of what consumers want and therefore advertisers are more than willing to flock to the platform.
Facebook may be beyond its days of exponential growth, but investors can expect FB stock to buoy their portfolios in the years to come. The company will likely continue to beat the market as it grows its advertising potential by drawing in new users and expanding its service.
As of this writing, Laura Hoy was long FB stock.
