Is Meta's stock still worth investing in? An easy way to invest in Meta.

Tech stocks are always subject to significant fluctuations. The stock prices of major companies such as Apple, Microsoft, and Alphabet have fallen from their highs, but the decline of Meta (formerly Facebook) was about twice that of other tech companies. Due to rising interest rates, a struggling advertising market, and intensified competition, the company laid off thousands of employees, and its stock price plummeted by 64%. However, in 2023, Meta bounced back, and since January 1, its stock price has risen by 163%, reporting strong financial results. What changes will Meta's stock price undergo in the future? This article shares information regarding Meta shares.

Why invest in Facebook?

• Meta - The world's largest traditional social media company
• Facebook is one of the stocks with the highest trading volume.
• Facebook is transitioning to the metaverse industry.
• Meta is significantly involved in the field of artificial intelligence.

As is well known, Facebook is a central platform in the development of social media and is one of the most traded stocks in the stock market. In October last year, Facebook underwent a strategic historical transformation, changing its group name to Meta platform and expressing its emphasis on the new concept of "metaverse." Currently, with approximately 3 billion monthly active users, Meta is the largest social media company in the world. Now, Meta is focusing on machine learning technologies, including AI technology, and over the next five years, investors can expect transformative changes brought about by Meta's innovations in AI technology and the metaverse.

Historical Turning Points of Meta

• In February 2004, the social network TheFacebook.com was born, allowing registered students to post photos and share information.
• In June 2004, over 250,000 students from 34 schools used the service, and major companies like MasterCard began to notice the site's popularity and started advertising. By the end of the year, Facebook's active users reached 1 million.
• In 2008, Facebook surpassed Myspace to become the most visited social media site, reaching a valuation of $15 billion as of 2007.
• In May 2012, Facebook went public at $38 per share, reaching a market capitalization of an astonishing $102.4 billion. In August of the same year, it acquired Instagram, which had a user base of just over 100 million at the time. By December of the same year, the monthly active users had exceeded 1 billion and were rapidly increasing.
• In 2014, Facebook acquired WhatsApp for $19 billion to complement its own services, reducing competition and solidifying its position at the forefront of the internet.
• From 2010 to 2019, the four most downloaded apps in the world were Facebook, Facebook Messenger, WhatsApp, and Instagram.
• In October 2021, Facebook Inc. renamed its parent company to Meta, reflecting its commitment to entering the metaverse industry.
• In 2022, the company made significant adjustments to its business and announced many new products and services such as Threads (a Twitter-like app) and Reels (a short video platform).
• In August 2023, Meta AI announced its latest model Llama 2, aiming to develop an innovative AI model that supports various applications.

Investors are not missing out on Meta's progress. Overall, Meta's development trajectory is filled with an optimistic atmosphere.

Is it worth investing in Meta stocks?

Transition to the Metaverse Industry

Facebook's original business model may fundamentally change, and the valuation and stock price of the company will also shift due to Meta's next business developments. If the metaverse is the next wave of social media, Meta is already at the forefront of it. Meta supports a flow of 3 billion monthly active users, and this existing community can serve as a solid foundation for the metaverse, allowing it to break free from dependence on online advertising revenue. For long-term investors, if they believe that the metaverse will truly be the next wave of social media development and want to invest in the metaverse concept, Meta should be a top priority.

Meta differentiates itself from competitors with AI technology.

Meta is one of the world's most advanced AI companies. They invest heavily in AI research and development and possess many AI-driven products and services. The management plans to leverage many advantages in AI to maintain relevance between users and advertisers. For example, they use AI to assist advertisers in creating ads, setting appropriate targets, optimizing ad creatives, measuring effectiveness, and automating delivery, thereby improving advertising effectiveness. Meta also utilizes AI to create immersive and realistic experiences in virtual and augmented reality, which differentiates them from many competitors. Competitors will likely find it difficult to keep up with the pace of Meta's AI innovations.

Efforts to Improve Productivity and Increase Profits

In the fourth quarter of 2022, Zuckerberg announced plans to reduce operating costs and cut long-term asset spending on buildings and facilities, while introducing many new products and services such as Threads and Reels. In the first quarter of 2023, Meta announced plans to invest $33 billion in "AI" support, which caused the stock price to bounce back. According to executives, since the introduction of the short video feature Reels, Instagram's usage time has increased by 24%. Meta also announced a large language model called LLaMA this year, demonstrating its efforts to build an open ecosystem.

Abundant Free Cash Flow

When viewed annually, Meta's revenue has been growing exponentially each year, with an average increase of 41.49% over the past five years, demonstrating the strong ability of Meta's social network to generate wealth. However, according to financial reports, the metaverse business incurred losses of over $10 billion in 2021, affecting Meta's overall profitability. The revenue from this business was $695 million, a year-on-year increase of 30.15%, but the operating loss reached $2.96 billion. Notably, high-growth stocks like Meta require a significant amount of free cash flow for business expansion, but currently, Meta has little need for debt repayment, which provides reassurance about its long-term financial sustainability.

Other Factors Affecting Meta's Stock Price

The main source of income is still advertising.

Entering the metaverse presents both advantages and disadvantages for Meta. In the fourth quarter report, a separate series of products called "Facebook Reality Labs" was introduced in addition to existing apps (Facebook, Instagram, Messenger, WhatsApp), which include VR hardware, software, and other metaverse-related content. In the third quarter, the revenue from the "Other" segment, which includes Oculus VR headset sales, increased by 195% year-on-year, but accounted for less than 3% of total revenue, with advertising revenue still being the primary source. While there is potential, it is still in the growth stage.

public opinion risk

Meta has recently been often involved in legal issues and user privacy protection concerns. In March last year, Mark Zuckerberg and some team members were called to testify in Congress, where they explained that the platform would not share misinformation regarding the novel coronavirus. This year, just weeks after the Q1 2022 earnings announcement, The New York Times reported that the Federal Trade Commission had sued Meta, alleging that the platform monopolized social media and abused its power. Negative media coverage can affect Meta's ability to maintain and enhance its brand power, which may indirectly influence its stock price.

Strong Competition

Meta is facing competition from companies like Apple and TikTok. Changes to Apple's iOS system have made it difficult for Meta and other social media companies to target advertisements to consumers, which is a blow to platforms that rely on advertising as their main source of income. Additionally, Meta is facing challenges not only from social media competitors like Snapchat but also from the impact of short video apps, with ByteDance's TikTok capturing nearly half of the younger user demographic, while the average age of Meta's user base is rising overall. In the long term, this poses a potential concern for Meta's development.

Future Forecast of Meta Stock Price

Meta's current PER (Price Earnings Ratio) is low and is supported by actual earnings. Objectively speaking, the risk of a decline in stock prices is temporarily limited to losses from the new metaverse business, changes in Apple's system, and competition from TikTok's short videos. If Meta can gradually resolve these issues, the stock price may rise further. Overall, Meta is still a good stock worth buying.

Meta is a key player in the social media space, boasting a massive user base. At the same time, it leads in investments in innovative technologies such as Oculus VR and Portal smart devices. The company's revenue sources are diversified, developing non-advertising businesses in AI, e-commerce, payments, gaming, and cloud services. Investors seeking reliable growth stocks should strongly consider Meta.

How to Invest in Meta Stocks

If you want to invest in Meta, you may face several issues. How do you invest in Meta stocks? Where do you buy Meta stocks?

In addition to going directly to a securities company, you can also consider stock CFDs (Contracts for Difference).

US Individual Stocks vs CFD Stocks

• Stamp duty: Required vs Exempt
• Profit methods: Mainly stock price rise vs two-way trading (opportunities available for both rise and downward movement)
• Tradable products: Stocks only vs A single CFD account can trade a variety of financial products such as stocks, indices, currencies, gold, crude oil, and cryptocurrencies.
• Trading hours: Exchange business hours only vs 24-hour trading available
• Stock ownership: Yes, dividends can be received vs No
• Trading fees: Required vs Not required

Personally, I find the flexibility and diverse trading opportunities of CFDs appealing. I believe a significant advantage is the potential to profit even in a downward movement market, especially during unstable times.

Advantages of Trading US Stocks on Mitrade

Mitrade provides an easy-to-use trading platform and supports over 300 stock CFDs. With adjustable leverage of up to 1:200 and the ability to trade in both directions, you can seize opportunities whether the market is rising or downward movement. Additionally, you can mitigate risks with take-profit, stop-loss, and negative balance protection tools.

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Would you like to open a free demo account and experience trading without any risk?

If I were to invest in Meta, I would evaluate its long-term growth potential and innovation, and allocate some funds accordingly. However, given the rapid changes in the technology industry, I wouldn't forget about diversifying my portfolio. Platforms like Mitrade are attractive because they allow for efficient investment across various asset classes.