Should You Buy Meta Platforms Stock?

Investors in Meta Platforms (NASDAQ: META) have seen impressive returns over the past year, with the stock soaring by 150%. As the company joins the ranks of Apple and Microsoft with a market capitalization exceeding $1 trillion, investors are left wondering if Meta’s stock is still a buy in 2024.

The company’s core advertising business has been a roller-coaster ride in recent years. The COVID-19 pandemic initially boosted demand for digital services, including advertising, leading to solid revenue growth in 2020 and 2021. However, challenges such as Apple’s privacy policy changes and competition from TikTok impacted Meta’s results in 2022. Despite a temporary downturn, the company bounced back in 2023, demonstrating the resilience of its business model.

On the other hand, Meta’s metaverse division, Reality Labs, continues to be a concern for investors. The division reported significant operating losses in 2022 and 2023, raising questions about the company’s long-term strategy in this nascent industry.

While Meta’s stock is trading at a reasonable price-to-earnings ratio compared to its historical average, the uncertainty surrounding its metaverse efforts and the ongoing need for cash infusions from its advertising business make it a hold for existing investors. For those considering investing in Meta Platforms, it may be prudent to wait and see how the company navigates the challenges ahead.

Overall, the investment thesis for Meta remains mixed, with potential for growth in its advertising business but uncertainties surrounding its metaverse ambitions. As the company continues to evolve, investors will need to closely monitor its progress and strategic decisions to determine if Meta’s stock is a buy in the long run.