Meta Platforms (META) remains one of the tech sector’s most favored stocks. It’s currently trading near all-time highs again, having rebounded from the recent tariff-driven dip linked to concerns about Trump-era policies. While that signals strength, it also raises caution for value investors, who typically prefer entering positions during pullbacks rather than at market peaks.
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Nonetheless, Meta is firing on all cylinders operationally and is now hiring AI talent with lucrative pay packages as it pursues an AI-powered existence. Moreover, the company is continually reducing its reliance on human labor and, therefore, utilizing AI to slash costs across the board.
Earlier this year, META targeted what it called “low performers” before executing a 5% workforce reduction, totaling 3,800 people. Further cuts were announced in META’s Reality Labs division, affecting roles tied to virtual reality (VR) products. The trillion-dollar tech giant is clearly on a mission to harness AI, even if it means losing a few people along the way — with its share price already reflecting this transition.
According to TipRanks’ price data, META has been on a monster run since April and is now 22% higher year-to-date.
Even with a temporary pullback in the stock price, it appears inevitable that the AI revolution has arrived, resulting in a growing wave of layoffs across the tech sector. At the same time, the quality of service rises at a lower cost. Tech companies may struggle to expand, but with the advent of AI, they have a lower need to seek growth—they can simply focus on reducing costs and raising margins without increasing sales.
All in all, META stock is likely to set record highs for a while yet, so I’m maintaining a stoutly confident Bullish stance on the stock.
Meta Shifts Developmental Budget Towards AI
As the AI arms race intensifies, reports have emerged of nine-figure compensation packages being offered to elite AI researchers, all in pursuit of the ultimate goal: developing artificial general intelligence (AGI). However, quite wisely, Michael Dell, the founder of Dell Technologies (DELL), has warned that such exorbitant pay packages could create complex internal management dynamics. Morale is one of those gold-dust business qualities that you can’t just buy; it has to be cultivated over time.
However, Zuckerberg seems insistent that AI leadership is worth fighting for. Meta is currently one of Nvidia’s (NVDA) largest customers, aiming for 1.3 million AI GPUs (graphics processing units) by the end of 2025. Given the company’s frontier approach to the field, such high demand means that an advanced AI GPU shortage could significantly impact the company’s performance expectations in the near term.
Meta’s recent $14.8 billion investment in Scale AI grants it a 49% non-voting stake, providing Meta with long-term access to Scale’s premium labeled datasets and talent pool. This is tangible evidence that Meta is fully committed to AI. Meanwhile, Scale’s CEO and co-founder, Alexandr Wang, is transitioning into a senior role within Meta’s newly formed Superintelligence Lab.
Meta’s Financials Indicate Balanced Valuation
Consensus estimates suggest that Meta’s year-over-year revenue growth will gradually slow, from around 15% in 2025 to approximately 10% by 2029. However, normalized earnings per share are expected to accelerate over the medium term, primarily driven by operational efficiencies, including those enabled by Meta’s proprietary AI tools.
Analysts currently forecast 7.5% normalized EPS growth for 2025, with this rate expected to increase to 15% by 2028. This improving earnings trajectory, coupled with ongoing share buybacks that are likely to keep share count flat or declining, strengthens the long-term return potential. Meta is trading at a P/E ratio of approximately 28, which is slightly above its five-year average of 26, indicating that it remains reasonably valued considering its growth outlook.
On the technical side, the stock does appear a bit stretched. The 14-week Relative Strength Index (RSI) is at 60, indicating positive momentum, though not in overbought territory. The price is also well above the 50-week moving average, which reinforces the view that sentiment is currently elevated. This may not be the ideal entry point for new investors, but it’s certainly not a reason to exit if you already hold the stock. Meta remains a premier growth name with a strong long-term outlook.
Is Meta Platforms a Good Stock to Buy?
On Wall Street, Meta stock has a consensus Strong Buy rating based on 41 Buys, four Holds, and zero Sells. The average META stock price target of $735.45 indicates a 3.5% upside potential over the next 12 months.
That said, the high-end estimate of $918 represents a potential 28% gain from the current price of $715, and I see this outcome as more likely than any sustained decline in Meta’s valuation over the next 12 months. The company is clearly focused on driving efficiency. As its AI capabilities become more deeply embedded, it stands to unlock significant margin expansion, particularly through the automation of labor-intensive processes.
These operational improvements should support further stock price appreciation, even as human talent continues to play a crucial role in innovation and creative strategy. As Meta’s operating model evolves, the balance between automation and expertise will be a key driver of long-term performance.
Meta Stock Bulls Take Charge
Meta stock is one of those standout names in the market that’s hard to criticize. While its valuation may appear slightly stretched, that’s to be expected for a high-quality company riding strong industry momentum. Even if the stock trades sideways over the next 12 months, there will likely be compelling entry points along the way.
With META now moving like a glacier towards AI-intensive operations, costs continuing to tumble, and Wall Street analysts remaining upbeat in their forecasts for the next 12 months–META stock bulls are in complete control.