Meta Platforms (NASDAQ:META) is a top tech stock in 2023, with shares outperforming the market. In fact, META stock is up a whopping 165% this year alone. Indeed, a strong earnings beat and a number of other factors are continuing to provide support for this social media giant. It is clearly aiming to head into a new age with its investments in key areas.
Notably, Meta Platforms has been making significant moves in target spaces. Its global expansion ensures promising revenue streams beyond the U.S. and Europe, offering value to investors.
Let’s have a look at three reasons investors and analysts are bullish on META stock right now.
Why Analysts Are Bullish
Analysts continue to be optimistic about Meta Platforms and its stock. The company continually advances its next-gen tech tools, like their AI Code Llama for coding assistance. While facing challenges with Threads, rival to X, Wall Street experts foresee a positive trajectory for Meta Platforms’ shares this year.
Citigroup analyst Ronald Josey affirmed a “buy” rating with a $385 price target for Meta Platforms, highlighting its advertising potential in social media.
META is a Powerful Player in Social Media
David Tepper, founder of Appaloosa Management, significantly boosted his META stock holdings, making it an 8% portfolio position. His fund has been accumulating Meta Platforms shares since March 2016. In the hedge fund realm, an 8% allocation to one stock is substantial. This reflects Tepper’s confidence in Meta Platforms, a dominant force in social media through several apps such as Facebook, Instagram, and WhatsApp.
META’s stock surged 167% in 2023, ranking second in the S&P 500 after Nvidia. Factors like its Quest 3 VR headset and Ray-Ban smart glasses could drive future growth. Moreover, Meta’s Q3 earnings on Oct. 25 will reveal more about recent launches, but Wall Street is more excited about ad revenue growth.
Impressive Resilience and Strength
Meta Platforms’ stock is holding up strong despite the broader market challenges. However, over-optimistic growth expectations and potential headwinds should be considered.
In Q2, META exceeded expectations with earnings of $2.98 per share and $32 billion in sales, marking a turnaround with growth. Furthermore, Q3 revenue is expected to reach the high end of guidance.
Additionally, Meta Platforms’ revival hinges on navigating the impact of Apple’s privacy changes, which limited tracking users’ activity, consequently affecting ad targeting. Moreover, META improved ad effectiveness through AI and automation, boosting its share of social media marketing revenue despite holding only 42% of user time. Also, digital ads outperformed the broader advertising market.
META Remains a Solid Buy
Meta Platforms is poised for strong growth with its focus on AR/VR, AI, and innovative products like Quest 3 VR headset and Ray-Ban smart glasses.
Moreover, Meta Platforms boasts solid financials with $31.5 billion in Q2 ad revenue and diversified earnings from platforms like Facebook, Instagram, and WhatsApp. Analysts anticipate growth, with Morgan Stanley projecting a bright future.
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.