Shares of Meta Platforms (NASDAQ: META) are up 23% year to date, following another strong earnings report in January.
Tigress Financial recently maintained the firm’s “strong buy” rating on the shares but made a substantial adjustment in its price target. The firm now sees Meta stock going to $935, up from the previous estimate of $645. Can Meta stock climb another 30% from the current $720 share price?
Investors are high on Meta’s prospects. The company is earning great returns on its investments in artificial intelligence (AI), with revenue up 22% in 2024 to reach $164 billion. Earnings grew even faster, up 60%.
With over 3.3 billion daily users across its family of apps, the company has a great opportunity to use AI to increase user engagement and grow ad revenue. Meta is making a big play on personalization. Its Meta AI assistant now has 700 million monthly active users, and it is expected to hit 1 billion this year.
The stock is trading at 28 times 2025 earnings estimates, which is not expensive, but for the stock to hit the firm’s price target, it would have to trade up to 37 times this year’s earnings. But that’s still within a range that could be considered “fair” for a company that is growing revenue at high double-digit rates and should maintain high margins over the long term.
One thing that may prevent the stock from hitting the firm’s price target is a lower rate of earnings growth, which could result from higher spending to support AI initiatives.
Still, Meta’s fourth-quarter earnings report went a long way to boost investor confidence about its AI roadmap and how these investments can benefit the business. Regardless of how the stock performs in the near term, Meta Platforms is well positioned to deliver solid returns for long-term investors.
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