Meta Platforms (NASDAQ: META) has been one of the hottest growth stocks to own in recent years. Since the beginning of 2023, it has skyrocketed by around 490%, turning a $10,000 investment into nearly $59,000. The social media stock has gone from being the stock seemingly no one wanted to own in 2022 to now becoming one of the most valuable companies in the world, with a market cap of close to $1.8 trillion.
The business has been doing well, and bullishness remains high for the stock. Can Meta Platforms turn a $10,000 investment into $1 million or more?
Meta has been experiencing some tremendous growth in recent years. Its highly popular social media apps, including Facebook, WhatsApp, and Instagram, attract billions of users. For marketers, that can make it incredibly enticing to advertise on those apps, as it’s easier to reach a specific target audience when potential customers are concentrated on a single platform.
The demand is evident, with Meta continuing to grow at a high rate. The company recently posted its year-end results for 2024, and revenue totaled $164.5 billion for the entire year, which is an increase of 22% from the previous year. What’s even more impressive is that the business grew its profits at an even faster rate of 59%, as net income totaled $62.4 billion.
Those are fantastic numbers for Meta. The company has amassed an impressive collection of social media assets into its organization, which ensures that it will do well as ad spending remains strong. And even though it has generated some mammoth gains in the past couple of years, it’s still not a terribly expensive stock, trading at almost 30 times its trailing earnings.
Meta has performed exceptionally well, but it’s not entirely a result of its own doing. It has benefited from factors outside of its control.
While the economy has been strong, many advertisers left X (previously known as Twitter) when Tesla CEO Elon Musk took over and put into place policies that loosened restrictions around the social media app. The U.S. government has also attempted to ban Meta’s biggest rival, TikTok. And with uncertainty still weighing over how that may play out, advertisers may be inclined to take the safer route and advertising on one of Meta’s apps.
If TikTok disappears from the U.S. market, a brand presence that a business may have been building up on that platform would effectively become limited in value. Advertising on one of Meta’s apps doesn’t involve taking on that risk.
