There may bot be a more well-known big tech stock than Meta Platforms (NASDAQ:META). The company has shown impressive performance this year, and there’s still potential for further value for shareholders.
With its focus on artificial intelligence and the metaverse, Meta Platforms stands out as a unique player in the U.S. market. The company’s involvement in machine learning technology, including generative AI, positions it for future innovations in the coming years.
Investors recognize the value of Meta Platforms at its current valuation. The company’s focus on reinvesting in platforms like Instagram and implementing cost-cutting measures has been successful.
Meta stands out as an attractive stock to buy and hold, as there are limited options in the mega-cap tech space that offer similar appeal. Let’s delve into the reasons why Meta is one of the best big tech stocks to buy right now.
What’s Happening with META
Despite a significant rebound, Meta’s stock continues to rise, with a 131% increase this year. The company’s recovery is attributable to a revival in the advertising market, improved engagement and ad targeting through artificial intelligence, and reduced metaverse spending.
Additionally, a Wall Street firm recently raised its price target on Meta’s shares, further boosting its positive outlook.
Meta’s metaverse expansion shows growth ambitions beyond social media, navigating challenges while sustaining user base and revenue. Q1 2023 revenue reached $28.65B, up 3% YoY.
META Valuation
Meta Platforms has experienced a remarkable journey since its establishment in 2004, evolving into a global leader in communication and information consumption. Its stock performance has been consistently impressive, displaying strong growth since its initial public offering in 2012.
With a resilient nature and long-term growth potential, Meta Platforms present an attractive opportunity for investors. The company exhibits solid financial health, boasting high gross and net margins that surpass industry averages.
Meta has achieved an impressive three-year revenue growth rate of 20.6%, surpassing the industry average. This positive trend is expected to continue, with Meta projected to outpace total revenue growth compared to its peers.
The market undervalues Meta compared to other companies in its industry. This makes it an attractive choice for investors seeking undervalued tech stocks in 2023.
What Now
Meta is a captivating company to monitor presently. Its management has made remarkable investments in AI and short-form video to combat TikTok’s strong competition.
As the largest social media platform globally, Meta possesses substantial in-house data. Such will gain even more significance as AI enables enhanced efficiency and revenue growth. However, Meta’s substantial spending on the metaverse poses uncertainty regarding the returns on those investments.
Meta’s stock became a deep value play as its valuation dropped, but the company continued to generate profits. With a strong balance sheet and solid free cash flow, Meta remains a top-level advertising and social media firm.
Analysts expect 36% earnings growth this year, making the stock reasonably priced at 24 times earnings for a company projected to achieve double-digit revenue and earnings growth in 2024.
On the date of publication, Chris MacDonald has a position in META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
