Meta stock eyes history as Facebook parent leaves Mag 7 rivals behind

The Facebook parent could be on the verge of an historic achievement by the close of Friday trading.

Feb 14, 2025 - 13:26

Meta stock eyes history as Facebook parent leaves Mag 7 rivals behind

Meta Platforms shares edged modestly lower in early Friday trading, but could extend an historic run of gains for the social media giant as it continues to outpace its peers despite concerns over the pace of AI investments and stretched valuations of meacap tech stocks.

The Facebook parent (META) is one of only two co-called Magnificent 7 tech stocks trading in positive territory for the year, but its 21.6% gain in more than four times that of Amazon (AMZN) , which is up 4.6%, and well ahead of the 3.45% advance for the broader Nasdaq benchmark.

On a one-year basis, Meta trails on the historic 83% gain for AI chipmaker Nvidia (NVDA) , but has added around $800 billion in value since May of 2024.

Presidents Day Sale: Get Free access to TheStreet Pro for 31 days – Claim your offer today!

Meta is also on the verge of notching its twentieth straight day of gain, extending a stretch that goes back to January 16, as investors appear to see the social media giant as the perhaps the first and most-successful megacap tech company to monetize at least some of its artificial intelligence investments.

Last month, CEO Mark Zuckerberg said Meta's capex would rise to between $60 billion and $65 billion, a $32 billion increase from 2024 levels and well ahead of the Street's consensus forecast of around $51 billion.

The group added that operating expenses would likely rise to between $114 billion and $119 billion, most of it focused on infrastructure.

Meta is one pace to become the sixth U.S. company to reach a $2 trillion valuation.
Bloomberg/Getty Images

"I expect Meta AI will be the leading assistant serving more than 1 billion people, Llama 4 will become the leading state of the art model," Zuckerberg said. "This is a massive effort, and over the coming years it will drive our core products and business, unlock historic innovation, and extend American technology leadership."

Meta betting big on Llama

Llama 3, Meta's central AI model, is built on an open source principal similar to that of China-based DeepSeek, the AI startup that rattled the tech world with a cut-priced Chatbot that outperformed its rivals.

It now boasts 700 million monthly active users and is targeting 1 billion-plus by year-end, and analysts see it helping to infuse profit growth across the whole of Meta's social media empire, which includes Facebook, Instagram, WhatsApp and the microblogging website Threads.

All that said, the 2025 outlook Meta delivered late last month, following a solid set of fourth quarter earnings, was curiously muted: the group declined to provide a full-year revenue forecast and said that first quarter sales would only meet Wall Street's $41.7 billion estimate at their very top end of their $39.5 billion to $41.8 billion range.

Analysts see full-year revenues rising around 15% from 2024 levels, implying an overall topline of around $190 billion, with earnings rising 6.2% to $25.34 per share.

But growth prospects for its ad sales, which will be helped by AI enhancements such as Advantage+ and a new machine learning system called Andromeda, run with Nvidia-made chips, continue to be a compelling longer-term story.

AI expected to drive ad revenue gains

"We are intrigued with the beginning development of AI engineering agents that can code and problem-solve like 'a good mid-level engineer'," said Benchmark analyst Mark Zgutowicz in a recent note.

"Given higher-end AI engineering capacity adds this year and expected R&D deleverage, we await more discussion of the potential efficiencies these agents can bring to the R&D line, perhaps exiting this year," he added.

CFRA analyst Angelo Zino, who carries a 'buy' rating with a $770 price target on Meta stock, is also bullish on the group's ad sales prospects thanks to its AI investments.

"While the motive is to improve the offering, we see paid content into AI interactions over time and note that Advantage+ is now at a $20B run rate," he said in a recent note.

"Threads has over 320 million users and is testing ads, although we think monetization is more of a 2026 story, while we expect video growth and AI Agents to become major growth stories in the coming quarters/years," he added.

More Tech Stocks:

Meta shares were last marked 0.24% lower in premarket trading to indicate an opening bell price of $726.80 each. The stock has added around $280 billion in value since the stock's winning streak began on January 16, and now sit just 8.7% from reaching a $2 trillion valuation.