1 week ago 4

Is Meta Stock A Buy? Facebook Parent Shares Rebound After Tariff Deal, Q1 Earnings

Meta Platforms (META) stock is attempting to rally back after a three month slump. An improving outlook on tariffs and stronger-than-expected first-quarter results should help.

Shares of the Facebook parent company are ahead 17% in May, after slumping 5% in April, 14% in March and 3% in February. Meta stock was hit by fears about tariffs and the removal of the "de minimis" import exemption slowing its advertising business. The tech giant is also spending billions on its AI push, raising the stakes for the performance of Meta's overall business.

↑ X NOW PLAYING Zuckerberg Is Investing Billions On AI. Why It's A Make-Or-Break Moment For Meta.

But Meta's first quarter results and the 90-day pause for President Donald Trump's China tariffs are helping ease concerns.

So is Meta stock a buy? Read below for the latest chart analysis for Meta stock as well as company news and ratings from Wall Street analysts.

Meta Stock In Cup-With-Handle Chart Pattern

IBD MarketSurge shows that Meta stock is in a cup-with-handle pattern with a 662.67 buy point. That entry represents Meta stock's high earlier this month before it pulled back following a report the company has delayed the rollout of its "Behemoth" Llama AI model.

Meta reached a record high of 740.91 on Feb. 14, when it was riding a 20-day streak of gains. Tariffs and other concerns pushed Meta to a more than 30% drawdown from that level by mid-April.

Meta's Relative Strength line is at 85 out of 99.

Meanwhile, Meta stock shows a 96 out of a best-possible 99 IBD Composite Rating, according to the IBD Stock Checkup tool.

Meta Q1 Earnings Beat

On April 30, Meta's first-quarter results and sales outlook eased fears about tariffs squeezing its advertising business. CEO Mark Zuckerberg indicated that its full-speed ahead for the Facebook parent company's significant AI investments.

Meta said it earned $6.43 per share on sales of $42.3 billion for the March-ended quarter. Analysts polled by FactSet projected the Menlo Park, Calif.-based company would post adjusted earnings of $5.23 per share on sales of $41.3 billion.

Sales increased 16% year-over-year. Earnings increased 37% to $6.43.

Majority Of Meta Stock Analysts Say Buy

Founded as Facebook and renamed Meta Platforms in 2021, the tech giant boasts more than 3 billion regular users across its Family of Apps, which includes Facebook, Instagram, WhatsApp and Threads.

That reach has enabled Meta to dominate the social media advertising market, and has made Meta stock a Wall Street favorite. Only Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), Amazon (AMZN) and Google-parent Alphabet (GOOGL) boast larger market caps than Meta. Those stocks, along with Tesla (TSLA), make up the so-called Magnificent Seven that powered the S&P 500's rally starting in 2023.

Even with a more than 400% run since the start of 2023, analysts are bullish on further growth for Meta.

Of the 71 stock analysts following Meta, 89% have a buy rating, according to FactSet. Meta has seven neutral calls and two sell warning among analysts.

The average target price for Meta stock by analysts is 696.50, according to FactSet, implying roughly 8.5% upside from Meta's closing price Tuesday. That is down from highs in February, however, when Meta stock has an average price target of 762.80 among analysts.

Wedbush analyst Scott Devitt reiterated an outperform call on Meta stock in a recent client note recapping the Q1 earnings season. "While sentiment had turned cautious ahead of the print, Q1 results were solid and guidance for Q2 revenue growth was encouraging," Devitt wrote on May 16.

Debate About AI Spending, Metaverse

Analysts are generally bullish about Meta's ability to use AI to strengthen its hold on the digital advertising market. Meta's digital advertising prowess makes it massively profitable, reporting $69.3 billion in operating income for 2024.

Still, there are questions from investors on the big long-term bets Zuckerberg is making.

The first debate is how quickly Meta can see a return on the tens of billions it is investing in data centers to power its AI ambitions, among other AI costs.

At the same time, Meta is also spending tens of billions on developing products and software to power Zuckerberg's vision for the metaverse.

AI is a much more popular topic among investors. Wall Street is mostly skeptical of the metaverse idea — even after Zuckerberg's Orion smart glasses demo impressed last fall.

Meta Market Cap

You can check for Meta's current stock price here. Meta's market cap was $1.62 trillion as of market close May 27. Here is how the stock has grown over time:

Time Period Meta Stock % Gain S&P 500 % Gain