Meta Platforms stock (NASDAQ:META) gained momentum after the company reported impressive first-quarter 2025 earnings. A major highlight from the earnings call was the explosive growth of Instagram Threads, which reached 350 million monthly active users — adding 30 million in Q1 alone.

While Threads still lags behind competitors like X (formerly Twitter), which has over 600 million monthly users, its rapid expansion and growing engagement are encouraging. CEO Mark Zuckerberg emphasized that time spent on Threads increased 35%, thanks to improved AI-driven recommendations.

He believes Threads is “on track to become our next major social app,” a statement that underscores Meta’s intent to create another billion-user platform. This momentum adds a fresh growth vector to Meta Platforms stock, particularly as the company identifies new monetization opportunities for Threads in the long term.

Meta Platforms Delivers a Blowout Q1

Meta Platforms stock reacted positively after the company reported Q1 2025 revenue of $42.3 billion — a 16% year-over-year increase that beat expectations of $41.1 billion. Net income surged 35% to $16.64 billion, or $6.43 per share, easily topping analysts’ consensus estimate of $5.28 per share.

Importantly, advertising revenue hit $41.39 billion, exceeding forecasts. While Meta flagged some caution from Asia-based advertisers ahead of trade regulation changes, its advertising strength remains resilient. The company’s AI-powered ad targeting tools continue to deliver strong performance, helping it outpace competitors in the digital ad space.

Meta Platforms stock also benefited from steady guidance for Q2 2025, with the company projecting revenue between $42.5 billion and $45.5 billion — roughly in line with Wall Street’s target of $44.03 billion.

AI and Reality Labs Drive CapEx Higher

Meta raised its capital expenditure forecast for 2025 to between $64 billion and $72 billion, up from a prior estimate of $60 billion to $65 billion. This increase reflects expanded investment in AI infrastructure, including data centers and chip design, as Meta looks to embed generative AI into all its apps and services.

A chunk of that spending continues to go into Reality Labs, Meta’s metaverse division, which posted an operating loss of $4.2 billion on just $412 million in revenue during Q1. Since late 2020, Reality Labs has racked up over $60 billion in losses — raising concerns among some investors.

However, Zuckerberg has remained committed to this long-term bet, believing virtual and augmented reality will eventually become a major computing platform. While short-term losses weigh on the bottom line, Wall Street has been more focused on the strength of Meta’s core business.

Valuation and Analyst Outlook for Meta Platforms Stock

Despite its meteoric rise, Meta Platforms stock trades at a forward P/E of 22.5x — below its 10-year average of 25.2x. The company has a market capitalization of $1.4 trillion and has returned over 620% to shareholders over the past decade.

Looking ahead, analysts expect Meta’s adjusted earnings to climb from $23.86 per share in 2024 to around $33 by 2027. At a 22x earnings multiple, META stock could reach approximately $725 by early 2027 — a significant upside from current levels.

Among 53 analysts covering Meta Platforms stock, 45 rate it a “Strong Buy,” with an average target price of $681 — about 15% higher than today’s price.

Final Thoughts: Should You Buy Meta Platforms Stock?

Meta Platforms stock remains one of the most compelling opportunities in big tech. With strong ad revenue, growing AI capabilities, and Threads emerging as a new success story, Meta is well-positioned for future growth.

While Reality Labs continues to be a drag on profitability, investors focused on the long term may find META stock an attractive buy — especially with analysts projecting meaningful upside over the next two years.

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