Meta Platforms (NASDAQ:META) offers exposure to various technology markets, including social media, virtual reality, and artificial intelligence. Despite recent layoffs, the company remains committed to pushing the boundaries of VR and AI.
With the recent market rally providing this stock with significant momentum, certain value investors may be keen on being patient for a better entry point.
However, considering the relative valuation of this stock compared to mega-cap peers, this is a company that’s clearly got big upside potential from here.
Here’s why I think investors should hold onto META stock, particularly for those positioning their portfolios for the future.
How High Can META Stock Fly?
Deutsche Bank (NYSE:DB) analyst Benjamin Black increased his price target on Meta (formerly Facebook) from $290 to $350 and maintained a buy rating.
Black cited growing optimism for a rebound in the digital advertising market, which could boost Meta’s profitability. The analyst also highlighted improved monetization trends with features like Reels and Messenger.
Positive economic data could influence the Federal Reserve’s decision to maintain interest rates and support a soft landing for the economy.
This is beneficial for Meta and other digital advertising companies, as it encourages brands to increase their advertising spending. The Nasdaq experienced a more than 1% increase in response to this news, highlighting Meta’s importance to large indexes.
The Launch of Threads
Meta’s recent successful launch of Threads, a social media app associated with Instagram, has the potential to disrupt platforms like Twitter.
With its solid infrastructure and existing resources, Meta can effectively operate Threads without significant additional costs. This positions Meta to potentially generate profits from the app while benefiting from users seeking alternatives to other platforms.
CEO Mark Zuckerberg announced that within hours of its launch, the new Threads social media app already had 10 million sign-ups. The following day, the user count increased to 30 million.
Zuckerberg expressed enthusiasm for the app’s early success but acknowledged the need for further development, despite this application now seeing more than 100 million daily active users.
Threads is being hailed as a potential rival to Twitter, with its own unique features and terminology. Zuckerberg expressed his belief that there should be a widely adopted platform for public conversations, highlighting the opportunity that Threads presents.
While Threads shares some similarities with Twitter, it distinguishes itself by using terms like “reposts” instead of retweets and referring to individual posts as “threads.”
Don’t Forget the VR Experience
Meta Platforms recently strengthened its focus on the metaverse with the launch of its affordable VR headsets. The Quest 3, priced at $499, offers a more accessible option compared to Apple’s more expensive VR headset.
For those on a budget, the Quest 2 is available for $299.99. Meta Platforms introduced Meta Quest+, a subscription service priced at $7.99 per month, providing users with access to two gaming titles monthly.
The success of Meta Platforms’ VR subscription service in the metaverse remains uncertain, but the company’s strategy of offering affordable VR experiences is a wise move.
Despite initial hesitation, the company’s advancements in AI and VR indicate positive momentum. With the share price already higher than earlier this year, owning some META stock may be a favorable choice.
On the date of publication, Chris MacDonald has a LONG position in META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
