Is META Stock Right For Baby Boomers or Too Risky?

Investing

Published: February 26, 2025 9:37 am

Baby Boomer investors should seek to take on less risk as they age and approach retirement if they’re not already retired. Undoubtedly, growth is still very much important to a retiree’s nest egg. That said, you don’t need to jump into the deep end of the growth waters to ensure your retirement sum appreciates as you draw down from it.

Of course, just because a Baby Boomer has less ability to take risks compared to their Millennial children doesn’t mean they don’t have the willingness. If one is using just a portion of their assets to invest in more volatile tech and growth stocks, I see few issues in sticking with the proven winners, like those in the Magnificent Seven cohort.

Key Points

Baby Boomers should still seek to fuel their portfolio with the occasional “cheap” growth stock.
Meta stock can be suitable for some Boomers and too risky for others. It’s a great long-term stock for those with the stomach.
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Is Meta stock too risky for Boomers?

In any case, it’s more a matter of asset allocation — will Meta Platforms (NASDAQ:META) stock comprise a significant part of the portfolio or just a portion? — and the temperament of Baby Boomers. Given Meta stock has pretty much been the “Magnificent One” year to date, with its impressive gains as the rest of the group exhibited more volatility and less impressive results, chasing the stock with a significant percentage of one’s net worth could prove unwise, regardless of a Baby Boomer’s appetite for risk.

Even if you’re numb to volatility and can handle the wild correction, Boomers should position themselves in a way such that their retirement will still be humming along even if Meta were to experience another one of its 70% drawdowns.

It seems like such a long time ago when Meta stock was unloved and crashing into a seemingly endless abyss. Between the peak in 2021 and the trough in 2022, shares of the social media and AI giant shed close to 75% of their value — that’s a jarring decline, to say the least.

And while shares made new highs in short order (just over a year later), there weren’t all too many analysts or investors who foresaw such a V-shaped rebound back in late 2022, when it seemed like the social media juggernaut was en route to losing its growth crown forever.

Meta AI is the new growth driver

Fast forward to today and Meta is one of the biggest and brightest forces in open-source AI with its LLaMA model. It could pour as much as $65 billion into AI efforts this year. It’s a substantial sum that may have some on pause. However, given how much Meta’s Mag Seven rivals are spending — Apple (NASDAQ:AAPL) recently hit the AI accelerator when it announced its $500 billion four-year spending plan — perhaps $60-65 billion in annual spending isn’t all too hefty.

Mark Zuckerberg previously stated that it could have an AI that can code like a “mid-level engineer.” That’s a profoundly transformative concept made by one of the most brilliant big tech founders who’s as hungry as he’s ever been. If AI is ready to sit in the coder’s seat in growing numbers, there could be more room to gain.

While Meta isn’t without its fair share of risks, especially now that shares are rolling over after a hot start to 2025, I do think Meta has a good shot of enjoying an incredible return on its seemingly excessive AI investments. If AI does deliver on the coding front, perhaps Meta is on its way to becoming a major margin gainer in the latter half of the decade.

Of course, it’ll need to spend heavily and take a margin hit if it’s to sustain such margin gains over the long run. All considered, I view Meta stock as a fantastic long-term holding, even for Baby Boomers. That said, I wouldn’t build a position that’s too large in one go. The stock is down 11% from its latest high and could be headed to bear market territory in short order.

How to buy Meta stock on the way down

Perhaps buying a starter position today with the intent to buy more at below $600 per share could be a game plan for an investor who’s looking to average down. For Boomers, such an approach could allow one to deal with significant downside risks in the event of a bursting of the AI bubble.

Meta stock has fallen close to 75% before, and it can do so again. That’s why buying into weakness with a long-term mindset is a must to navigate a name that’s no stranger to turbulence. For now, though, I view the latest correction as nothing to fear. The stock remains cheap at 27.5 times trailing price-to-earnings (P/E).

So, is Meta too risky for Boomers? It depends on the mentality and game plan of the Boomer.