Meta Platforms (NASDAQ:META | META Price Prediction) has had a terrific past few years, and the company has found what it was missing the most: growth. In 2022, META stock was down 76% from its peak at one point. Back then, the problem seemed too big to solve.
Zuckerberg was pouring money into the Reality Labs segment, thinking the Metaverse would be the future. This cash came from the profitable “Family of Apps” segment, which itself was seeing waning growth, with monthly active users growth turning negative.
Analysts believed Facebook was on its way out, as the older demographic used it the most, with younger people turning to TikTok and Snapchat. And with Reality Labs turning out to be a money pit, META stock kept declining in 2022.
META stock auspiciously started recovering right as ChatGPT was first released in November 2022. The company’s fortunes quickly followed suit, as Zuckerberg dumped cash into AI instead of Reality Labs. And this time, Wall Street loved it.
META stock is up over 680% from that $90 low back in November 2022.
But the question is, how long can the momentum keep going?
Stellar Q2 earnings will likely carry over positive momentum to Q3
Meta’s July 30 release of Q2 2025 metrics was the kind of beat-and-raise that reminds investors why the stock has tripled in two years. Revenue came in at $47.5 billion, up 22% year-over-year and a full $2.8 billion ahead of the consensus that had already been nudged higher through the spring.
Ad impressions rose 11% and the average price per ad rose 9%. Margins are also on an uptrend, and even Reality Labs narrowed its loss to $4.5 billion. In fact, Ray-Ban Meta glasses may find a new niche, as paired up with AI and a digital display, these are becoming extremely powerful devices.
Management guided Q3 revenue to $47.5-50.5 billion, the midpoint of which implies 20% year-over-year growth. Analysts have coalesced around $6.62 in Q3 EPS, but that number has been creeping higher, and several desks have begun to model something closer to $7 on the back of still-robust ad checks and a weaker dollar.
The buy-side whisper is that guidance could again prove conservative.
And in turn, META stock may soar another leg up.
Should you buy or sell META stock today?
The narrative has shifted from “Can Zuckerberg stop the bleeding?” to “How big can the AI moat become?” A recent $14.2 billion infrastructure partnership with CoreWeave (NASDAQ:CRWV) will boost its AI cluster significantly. AI is already leading to an ad boom, and the assistant has crossed 1 billion active users according to Meta.
You’re paying 25.7 times earnings for META stock today. If you strip out the extra net cash, the earnings multiple rounds to 25 times. This is rather inexpensive for a tech company expected to grow revenue at ~16% annually in the coming years. EPS is also expected to grow by ~11.6% due to AI investments, but it is still impressive for a mature company like Meta.
Unless October 29’s call guide dramatically disappoints, momentum from the June quarter should carry straight into the holiday period and set up another beat-and-raise cadence for 2026.
The average price target of $853 already implies 20.2% upside potential from here. The highest price target is $1.1k, which it is likely to hit next year if AI continues to boost financials.
And even if Meta Platforms does not beat analyst estimates in the coming quarters, it should still perform well. If Meta meets analyst estimates and Wall Street holds the multiple, the gains will be satisfactory.
As such, buying makes much more sense. I expect Q3 to go well and restart the rally for META stock later this month.
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