META Stock To $1,500?

Core Insights - Meta stock has doubled from $370 in early 2024 to approximately $780, with potential for further growth driven by AI integration [2][10] - The company's advertising revenue reached $46.6 billion in Q2 2025, a 21.5% year-over-year increase, with a 9% rise in average ad pricing [3][9] Key Growth Drivers - Instagram is projected to account for over 50% of Meta's US ad revenue in 2025, up from 7% a decade ago, indicating significant margin expansion opportunities [8] - Meta's 2025 capital expenditure plans include investments in AI infrastructure, such as a 5-gigawatt data center and over a million graphics processors, positioning the company as a leader in AI-powered advertising [8] - Despite losses exceeding $60 billion since 2020, Reality Labs is seen as a major untapped revenue opportunity, with 2025 being a pivotal year for potential revenue generation [8] - Q2 2025 revenue reached $47.5 billion, a 22% increase year-over-year, with net income rising 36% to $18.3 billion, indicating strong operating leverage [8] Path to Doubling - For Meta stock to double, consistent revenue growth of 15-20% annually and margin expansion are necessary, achievable through AI monetization, user engagement, strategic bets, and operational efficiencies [9][13] - Revenue is anticipated to exceed $265 billion within three years, with earnings projected to nearly double from under $24 per share in 2024 to over $45 per share in 2028 [9] Valuation Outlook - Given the deep integration of AI and improving profitability, an upward revision in Meta's valuation multiple is expected, potentially exceeding $1,300 within three to four years [10] - Current trading at approximately 28 times trailing earnings is lower than competitors like Amazon and Microsoft, suggesting room for valuation growth [9][10] Strategic Initiatives - Optimize AI for higher ad performance and expand generative AI for ad creation and targeting across platforms [15] - Monetize new surfaces like Threads and enhance WhatsApp business features to drive engagement [15] - Focus on growing video consumption and effective monetization through Reels [15] - Maintain disciplined expense management to fund AI investments while leveraging custom MTIA silicon for optimized AI performance [15]