As Meta Rolls Out Threads Ads Around the World, Should You Buy, Sell, or Hold META Stock?

Core Insights - Meta Platforms has experienced a significant stock price increase of nearly 487% over the past decade, leading to a market capitalization of approximately $1.66 trillion, placing it among the "Magnificent Seven" tech companies [1] - The company is transitioning from its origins as Facebook to a broader digital ecosystem that includes Instagram, WhatsApp, Messenger, and Threads, with a strong focus on artificial intelligence (AI), augmented reality, and metaverse ambitions [2] - Despite strong revenue growth, concerns over high spending, particularly in AI, and the durability of ad demand have created volatility in investor sentiment [3][6] Financial Performance - Meta's Q3 2025 earnings report showed a 26% year-over-year revenue increase to $51.2 billion, driven by strong advertising performance and AI-driven targeting [9] - Adjusted earnings per share (EPS) would have risen to $7.25 from $6.20, significantly better than the reported diluted EPS of $1.05 [10] - The company anticipates Q4 revenue between $56 billion and $59 billion, but has projected a substantial increase in capital expenditures for 2025, estimated between $70 billion and $72 billion, nearly doubling from 2024 [11] User Engagement and Growth - Threads has rapidly gained traction with over 400 million monthly users, and daily engagement is now comparable to that of Elon Musk's X, indicating its potential as a revenue-generating platform [3][4] - Family daily active people (DAP) grew by 8% annually, highlighting the deep integration of Meta's platforms in users' daily digital lives [10] Market Sentiment and Analyst Outlook - Despite recent stock price declines, Wall Street analysts maintain a "Strong Buy" consensus for Meta, with 45 out of 56 analysts recommending a strong buy and an average price target of $834.92, suggesting a 26.74% upside potential [15] - The 14-day RSI indicates a neutral to bullish sentiment, while the MACD oscillator shows bearish trends, suggesting ongoing selling pressure [7] Strategic Initiatives - The introduction of ads on Threads marks a significant shift for Meta, transitioning the platform from an ad-free experience to a monetized service, which is expected to enhance its advertising ecosystem [16] - Meta's heavy investment in AI and related technologies is seen as a long-term strategy to maintain competitive advantages, despite short-term financial pressures [17]