ZACKS·2025-11-28 11:01Core Insights - Meta Platforms is experiencing significant growth in advertising revenues, with a year-over-year increase of 25.6% in Q3 2025, reaching $50.08 billion, which is an improvement from previous quarters [2][3] - The company is leveraging advancements in AI to enhance ad performance and efficiency, contributing to a robust annual run rate for AI-powered ad tools exceeding $60 billion [4] - Meta, along with Alphabet and Amazon, is projected to capture over 50% of global ad spending in 2025 and 56.2% in 2026, indicating strong market positioning [5] Advertising Revenue Growth - In Q3 2025, advertising revenues constituted 98.6% of Meta's Family of Apps revenues and 97.7% of total revenues [2] - The total number of ad impressions served increased by 14%, driven by user engagement and growth, particularly in video formats [3] - The average price per ad rose by 10% year-over-year, reflecting increased advertiser demand and improved ad performance [3] Competitive Landscape - Meta Platforms faces stiff competition from Alphabet and Amazon in the advertising space [7] - Alphabet reported Q3 2025 revenues of $74.18 billion, a 12.6% year-over-year increase, with YouTube ad revenues growing by 15% to $10.26 billion [7] - Amazon's advertising revenues grew by 24% year-over-year to $17.7 billion, aided by partnerships that expand its advertising reach [8] Stock Performance and Valuation - Meta Platforms' shares have increased by 11.6% over the past 12 months, underperforming the broader Zacks Computer and Technology sector, which returned 27.9% [9] - The stock is trading at a forward price/sales ratio of 6.96X, compared to the sector's 6.61X, indicating a premium valuation [10] - The Zacks Consensus Estimate for 2025 earnings is $28.17 per share, suggesting an 18.1% year-over-year growth [10]