Does META's Growing Social Commerce Footprint Make the Stock a Buy?
According to Shopify, which cited Statista data, 89% of social media marketers prefer Facebook to drive social commerce sales, while one-third of social commerce buyers prefer to buy through Facebook. Instagram, on the other hand, is used by roughly 26% of the global population over the age of 13. Shopping tags and shop tab helps users discover products and purchase them over the Instagram platform. For WhatsApp, META has introduced AI tools that help businesses on WhatsApp assist their customers and help them discover new products. Integrated AI helps businesses on WhatsApp create ads on Facebook and Instagram more easily.
Meta Verified on Instagram, Facebook and WhatsApp is a popular initiative under which the company offers four subscription plans to help businesses build credibility. All plans include the verified badge, account support and impersonation protection. This boosts consumer trust and attracts new businesses to the platforms.
In first-quarter 2025, WhatsApp Business Platform, as well as Meta Verified subscriptions, contributed to deliver 34% year-over-year growth in Family of Apps other revenues, reaching $510 million.
META's Latest Offerings to Attract Marketers
The company recently announced features to the Ads Manager that enable businesses to manage their marketing strategy across WhatsApp, Facebook and Instagram. Businesses can now upload their subscriber list and either manually select marketing messages as an additional placement or use Advantage+. META's AI system will then optimize budgets across placements to maximize performance. Ads Manager will help businesses in creating ads in Status once the feature is available.
Meta Platforms is planning to introduce Business AI that can make personalized product recommendations and facilitate sales on any business' website. Over a WhatsApp chat, the Business AI can also follow up with customers to answer questions and provide updates. Moreover, Meta Platforms plans to launch calling and voice options for large businesses that use the WhatsApp Business Platform, thereby strengthening the relationship between businesses and customers.
In June, Meta Platforms introduced channel subscriptions, promoted channels and ads in WhatsApp's Status tab in Updates, which is currently used by 1.5 billion people per day globally. This is expected to further attract advertisers, thereby driving META's ad revenues, which accounted for 98% of total revenues in the first quarter of 2025.
Meta Platforms' focus on integrating AI into its platforms — Facebook, WhatsApp, Instagram, Messenger and Threads — is driving user engagement to boost ad revenues. AI is heavily dependent on data, of which META has a trove, driven by its more than 3.43 billion daily users. Meta AI usage continues to increase, with roughly one billion monthly users globally. The company's initiative to add updates that will help Meta AI deliver more personalized and relevant responses is expected to boost engagement.
META Outperforms Sector, Peers
META's shares have appreciated 22.8% year to date (YTD), outperforming the broader Zacks Computer & Technology sector, as well as its advertising peers, including Alphabet GOOGL, Amazon AMZN and Snap SNAP. Meta Platforms, Alphabet and Amazon are expected to absorb roughly 50% of the projected global ad spending by 2028.
Shares of Alphabet and Snap have dropped 5.2% and 14%, respectively, on a YTD basis. The broader sector and Amazon have climbed 8.2% and 1.8%, respectively, over the same timeframe.
META Stock's Performance
META shares are trading above the 50-day and 200-day moving averages, indicating a bullish trend.
META's Estimate Revision Shows Upward Movement
The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at $5.73 per share, up by a penny over the past 30 days, indicating a 11.05% year-over-year increase.
The consensus mark for 2025 earnings is pegged at $25.31 per share, up 0.6% over the past 30 days, indicating a 6.08% increase over 2024's reported figure.
META Shares are Overvalued
META shares are overvalued as suggested by the Value Score of D. In terms of the forward 12-month Price/Sales (P/S), META is trading at 9.11X, a premium compared with the broader sector's 6.65X.
Meta Platforms shares are trading at a premium compared to Alphabet, Amazon and Snap. In terms of the forward 12-month P/S, Alphabet shares are trading at 6.32X, while Amazon is trading at 3.25X and Snap at 2.52X.
P/S Ratio (F12M)
Here's Why You Should Hold META Stock Right Now
Meta Platforms is spending heavily on expanding AI infrastructure. For 2025, capital expenditure is expected to be between $64 billion and $72 billion, driven by META's Gen AI initiatives and core business.
Operating expenses are expected in the $114-$119 billion range, with headcount expected to increase within infrastructure, monetization, Reality Labs, Generative AI, regulations and compliance. Regulatory concerns in the United States and Europe, along with tariffs and premium valuation, make the stock a risky bet.
Although these investments bode well for the company's longer-term prospects, we believe the lack of monetization of new platforms, such as Threads and Meta AI, is a concern. Meta Platforms plans to focus on scaling and deepening engagements for Meta AI over the next few years. Ad revenues are expected to suffer from uncertainty related to higher tariffs and challenging macroeconomic conditions.
META currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable point to accumulate the stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity.
Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Snap Inc. (SNAP): Free Stock Analysis Report
Meta Platforms, Inc. (META): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
2 hours ago
- Globe and Mail
My 2 Top Quantum Computing Stocks to Buy Now
Key Points Much like artificial intelligence (AI), quantum computing has attracted investors for its game-changing potential. Quantum computing is in its early days of growth, making now a great time to look for future winners. 10 stocks we like better than Alphabet › Quantum computing has been turning heads in the investment world, much like artificial intelligence (AI) has done and continues to do. The reason? Both of these areas could be game changing for businesses and our daily lives -- for example, these technologies could result in the development of life-saving drugs, may streamline factory operations, and help you organize your daily tasks. All of this may result in supercharged earnings growth for the companies leading the way. AI and quantum computing are complementary but different: AI involves the training of large language models (LLMs) so that they can go on to solve complex problems. Quantum computing harnesses the behavior of subatomic particles -- and their ability to scale exponentially -- to solve problems that are impossible for classical computers to handle. Both technologies are in their early days of growth, though AI already is being applied to real-world problems and generating major revenue for companies -- quantum computing may take several years before becoming generally useful, some experts have predicted. But the fact that quantum is just getting started is great news for investors because it offers us plenty of time to get in on these stocks and benefit from their full growth story. And at the same time, you can minimize risk by investing in companies that already have proven themselves in other areas and are profitable. With this in mind, here are my top two quantum computing stocks to buy now. 1. Alphabet Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) is mainly known for its Google platform -- from the world's most popular search engine Google Search to cloud computing unit Google Cloud. Together, these businesses have helped the company generate billions of dollars in revenue over the years. And what's also compelling is that Alphabet has understood how to invest in its business, resulting in gains in return on invested capital too. GOOG Revenue (Annual) data by YCharts This company continues to excel in its markets and has invested in AI -- applying the technology to its business and selling AI tools to others. On top of this, Alphabet aims to win in quantum computing as well, and might be on the right track to do so. Late last year, the company announced Willow, its quantum chip that already has accomplished two big things. It's shown that it can reduce errors when scaling up with more qubits, or the particles that process data -- this is a big deal, since errors have been a big problem with quantum systems. And second, it performed a computation in a few minutes that would have been impossible for even the most sophisticated supercomputer. Alphabet says the Willow generation of chips may help quantum computing become generally useful -- reaching a huge milestone. Considering Alphabet's solid, profitable business and progress in quantum computing, it's a no-brainer buy at the dirt cheap price of 18x forward earnings estimates. 2. Nvidia You may think mainly of AI when you think of Nvidia (NASDAQ: NVDA) -- and that's right. The company dominates the AI chip market and sells a full portfolio of related elements that have been driving enormous revenue growth. In the latest fiscal year, Nvidia's revenue surged 114% to $130 billion, a record, thanks to this focus on AI. But Nvidia also may benefit from the quantum computing market too -- and it may not have to wait very long. This is because Nvidia's computing platforms can be used now to help tackle problems facing quantum computing, such as error correction, and help develop hybrid AI/quantum systems. To get the ball rolling, Nvidia recently announced it's building an accelerated quantum computing research center in Boston, to open later this year. All this means that Nvidia, which has been flying high thanks to soaring AI-driven revenue, also may see itself generating growth as quantum computing develops, and then if and when it reaches the general use stage. Meanwhile, as an investor, you don't face significant risk, since Nvidia already is highly profitable thanks to its AI business and also generates revenue by selling its chips to gaming, robotics, and professional visualization customers. So, by investing in Nvidia, you're betting on an established company that's delivered big results -- and at the same time, you're positioning yourself for a potential quantum computing win too. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor 's total average return is1,047% — a market-crushing outperformance compared to180%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.
Globe and Mail
3 hours ago
- Globe and Mail
Broadcom Repays Credit Facility with Senior Notes
Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Broadcom ( (AVGO)) has shared an announcement. On July 11, 2025, Broadcom Inc. repaid all outstanding obligations under its existing credit agreement, which originally provided a $30.4 billion term loan credit facility. This repayment was facilitated by the issuance of $6 billion in senior notes, consisting of notes due in 2030, 2032, and 2035, which were sold to underwriters including J.P. Morgan Securities, Morgan Stanley, and Wells Fargo Securities. The move to issue senior notes and repay the credit facility reflects Broadcom's strategic financial management and could impact its financial positioning by potentially reducing interest expenses and altering its debt structure. The most recent analyst rating on (AVGO) stock is a Buy with a $240.00 price target. To see the full list of analyst forecasts on Broadcom stock, see the AVGO Stock Forecast page. Spark's Take on AVGO Stock According to Spark, TipRanks' AI Analyst, AVGO is a Outperform. Broadcom scores highly due to its strong financial performance, driven by robust growth in AI segments and solid profitability. The earnings call provided positive guidance, reinforcing confidence in future growth. However, high valuation metrics and debt levels warrant caution despite the company's optimistic outlook. To see Spark's full report on AVGO stock, click here. Broadcom Inc. operates in the semiconductor and infrastructure software solutions industry, offering a wide range of products and services that cater to data center, networking, software, broadband, wireless, and storage markets. Average Trading Volume: 22,298,731 Technical Sentiment Signal: Buy Current Market Cap: $1307.1B For a thorough assessment of AVGO stock, go to TipRanks' Stock Analysis page.
Globe and Mail
4 hours ago
- Globe and Mail
Archer Aviation CFO Mark Mesler Resigns
Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Archer Aviation ( (ACHR)) has shared an announcement. Mark Mesler has resigned as Chief Financial Officer of Archer Aviation effective July 7, 2025, after being on medical leave since September 2024. Priya Gupta will continue as the acting CFO, while Harsh Rungta remains the Senior VP of Finance. Mesler's transition includes a severance package and accelerated stock vesting, reflecting a structured leadership transition within the company. The most recent analyst rating on (ACHR) stock is a Buy with a $12.50 price target. To see the full list of analyst forecasts on Archer Aviation stock, see the ACHR Stock Forecast page. Spark's Take on ACHR Stock According to Spark, TipRanks' AI Analyst, ACHR is a Neutral. Archer Aviation's overall score reflects significant challenges in financial performance due to its developmental stage, lack of revenue, and reliance on financing. Technical indicators suggest mixed momentum, while valuation remains challenging with negative earnings. Positive developments in strategic partnerships and liquidity were highlighted in the earnings call, but FAA certification and high expenses pose risks. To see Spark's full report on ACHR stock, click here. Archer Aviation operates in the aviation industry, focusing on the development and production of electric vertical takeoff and landing (eVTOL) aircraft, aiming to revolutionize urban air mobility. Average Trading Volume: 34,630,964 Technical Sentiment Signal: Buy Current Market Cap: $6.63B For detailed information about ACHR stock, go to TipRanks' Stock Analysis page.
