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With record-breaking Q1 profits, $72B AI investments, and Threads crossing 350M users, Meta is powering through the future of digital innovation through technological advancement and the addition of enticing features to their various products and services.
Meta Platforms Inc. (NASDAQ: META), the parent company of social media platforms Facebook, Instagram, WhatsApp, and Threads, has enjoyed unprecedented control over the digital communication and advertising universe for years. Fast forward to 2025, and the company is still catching the swell of a series of game-changing currents, most prominently with its major bets on artificial intelligence (AI), platform evolution, and exciting development of the metaverse.
Even with stratospheric revenues and a strategy that has certainly innovated strategically, regulatory scrutiny abounds, along with continued losses in Reality Labs. This brings us to the ultimate question: Should long-term investors still consider Meta a great stock to buy for their portfolios?
Meta’s strong first-quarter 2025 results delivered positive surprises across the board, and an underlying growth story continues to build confidence in the company’s core business. Revenue was an equally supportive $42.31 billion, up 16% yr/yr. Most remarkable, though, was the increase in net income, which exploded to $16.64 billion, a 35% increase from the same quarter last year. Earnings per share were $6.43, ahead of market expectations.
This impressive growth wasn’t just driven by more users being active, it showed a commitment to improving operational efficiency. The proprietary platform shipped to the company’s operating margin of 41%, compared to 38% in Q1 2024. Such margin expansion further highlights Meta’s demonstrated ability to massively scale while generating bottom-line expansion, even while traversing large investment cycles and market volatility.
Artificial intelligence has quickly become the centerpiece of Meta’s long-term corporate vision. Per its instructions, the company aims to spend $64-$72 billion in capex through 2025—mostly on AI infrastructure, compute power, and integrating products.
Meta AI, the company’s personal AI assistant, now has almost 1 billion monthly active users. So much engagement makes Meta more than just a worldwide leader in social media. It gives Meta a fighting chance in the AI war. AI integration isn’t just limited to user-facing applications, it runs through ad tech, moderation systems, messaging integrations, and device interfaces.
The rollout of AI-powered smart glasses and upgrades throughout Meta’s suite of apps is all part of a calculated move to stay on top of the world’s software and eventually hardware ecosystems. While Apple and Google have their own AI endeavors, Meta’s size and thus user-scale offer a massive advantage when it comes to training data and real-world deployment.
Though the economy continues to be uncertain, advertising is the one “fairly certain revenue stream” for Meta. Ad impressions were up 5% year-over-year and the average price per ad increased by 10%. These metrics point to two impossibly critical factors: sustained user engagement and the value advertisers continue to see in Meta’s extensive targeted ad infrastructure.
It’s not just a temporary blip. The core platforms—Facebook, Instagram, and WhatsApp—are still growing strongly on DAUs and time spent. Indeed, Threads, Meta’s new Twitter/X competitor, recently topped 350 million monthly active users. The platform may not be a big revenue driver, yet it’s successfully starting to onboard advertisers globally and has set the stage for increased monetization moving forward.
In a far more crowded and splintered digital media landscape, Meta's audience attention retention at scale gives it a further critical negotiating lever against advertisers. The strategic importance of first-party data, made even higher due to stricter privacy laws and the deprecation of third-party cookies, provides Meta a huge advantage over smaller platforms.
While AI and advertising return big bucks, the company’s huge bet on the metaverse through Reality Labs keeps having people worried. The division’s operating loss came to $4.2 billion just in the first quarter of 2025! Cumulative losses in this segment now top $50 billion since its launch.
Critics would counter that the vision for the metaverse is still too fledgling and misaligned with consumer momentum. As we know from the many VR arcades that sprang up with the launch of hardware that, despite being technically incredible, never penetrated the mainstream. Additionally, developers are still gun-shy about creating experiences for Meta’s Horizon Worlds as user demand and monetization models are still unclear.
Proponents of Meta’s grand vision contend that big, speculative bets are usually not fully realized for years. That Reality Labs segment, while today hemorrhaging cash, may develop into the foundation of the next computing paradigm if Meta is able to maintain its momentum and inventive spark in the course of the subsequent decade.
Meta’s regulatory headaches are only growing, most notably in Europe. Recently, the European Commission has objected to Meta’s ad-free subscription model, indicating it would not fit within the region’s stringent data privacy model established under the General Data Protection Regulation (GDPR). Such moves may make it impossible for Meta to continue using the same monetization tactics in its most lucrative markets starting later this year.
In the United States, the Federal Trade Commission is still pursuing an antitrust lawsuit aiming to unwind Meta’s acquisitions of Instagram and WhatsApp. While the outcome is still far from settled, the case is part of a larger effort by regulators to rein in the growing influence of Big Tech companies. Given how much of the user experience and potentially revenue streams may be affected by any decision specifically preventing such cross-platform integration, the stakes are material.
Though the company has developed a strong legal team and historically skated through regulatory clashes, persistent legal threats create uncertainty and limit growth plans.
Even with these headwinds, sentiment surrounding Meta’s stock is largely positive among analysts and institutional investors. By the end of the replacement period in early May 2025, the stock would be trading at around $587.31. The average 12-month price target among all the big investment firms is currently $699.26, implying potential upside of more than 16%. Some bullish estimates put the target even higher at $935, hoping for better-than-expected AI monetization and ongoing advertising growth.
For the remainder of the year, projections show a modest increase, averaging between $588 in May and climbing to more than $605 in December. These figures the making on the side of 13% annual return since, before dividends / share buyback are counted.
Revenue growth is starting to come through on earnings growth, but valuation multiples still look relatively attractive. With a forward p/e in the low twenties, Meta seems like a very reasonable price given its market size, innovation pipeline and cash-generating ability.
So while Meta Platforms in 2025 is by no means a risk-free investment, it is still one of the most dangerous threats lurking in the global tech battle. Its core advertising business is as strong as ever. The integration of AI is rapidly changing its product ecosystem, and its continued expansion into all areas of social communication grows more significant. The company’s day one, five-hundred-million-dollar investment in generative AI, along with rapid accretive investments in mixed reality, reveals a longer-term ambition.
While the ongoing losses in Reality Labs and regulatory headwinds are both serious concerns, they’re counterbalanced by the company’s financial strength and execution of their core businesses, which remains consistent. With tens of billions in free cash flow, Meta has the luxury to experiment and pivot, and weather temporary setbacks while still rewarding shareholders handsomely.
From a fundamental perspective, Meta still presents an attractive growth narrative, supported by their unmatched scale, deep-rooted culture of innovation, and inherent profitability. To investors looking for an early-market pick positioned to shape and ultimately benefit from the future of how we connect and communicate, Meta continues to be one of the best investment opportunities in 2025.
