Meta Platforms Is One Stock You Should Hold FOREVER

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Chris MacDonald

Sat, Sep 23, 2023, 9:00 AM 4 min read

Meta Stock and Vietnam

Meta Platforms is increasing its metaverse technology investments in Vietnam. Joel Kaplan, Meta’s VP for US Public Policy, mentioned that the company started moving production to Vietnam four years ago, but the COVID-19 pandemic delayed further progress.

Meta is looking to expand its presence in Vietnam after a meeting between its executives and Vietnam’s Prime Minister Pham Minh Chinh at Meta’s headquarters.

Both nations reaffirmed their commitment to partnerships in science, technology, and research and development, acknowledging the contributions of US companies like Meta to Vietnam’s Comprehensive Strategic Partnership.

Kaplan mentioned more collaborations with Hanoi, such as the National Innovation Center and the Vietnam Government Portal, to support Vietnam’s digital transformation.

Meta also plans to aid SMEs and contribute to various sectors, including AI, digital transformation, and the digital economy.

META Fundamentals

Meta Platforms, valued at $784.99 billion, emerged from a single Facebook app and now offers a diverse app portfolio serving billions worldwide.

The company uses metrics like daily and monthly active users to measure Facebook’s reach and impact. Earnings and revenue have also grown steadily over five years.

Meta Platforms exhibits a robust 17.2% return on equity, ensuring substantial returns for shareholders, and maintains a healthy 18.3% net margin.

Meta relies heavily on advertising, with over 98% of its Q2 2023 revenue coming from this source, expected to grow further with improved ad targeting. It’s so-called “Year of Efficiency” has enhanced its profitability through cost-cutting and AI investments, shaping its future business strategy.

META Stock Will Continue to Soar

Recently, Morgan Stanley (NYSE:MS) analyst Brian Nowak gave Meta Platforms an “overweight” rating, with a surprising price target of $375 for META stock, suggesting significant potential upside.

Nowak predicts Meta Platforms’ earnings to reach $20 per share by 2024, driven by untapped revenue potential from Facebook’s Reels feature, which is akin to TikTok.

This projection surpasses Wall Street’s expectation of $16.85 per share in 2024. While it’s an ambitious estimate, I concur with Nowak, as Reels may be underestimated compared to TikTok and Elon Musk’s X/Twitter.

The outcome of Reels on META stock hitting $375 is uncertain, but Nowak maintains optimism.

Meta’s success relies on user engagement across its platforms, which drives ad exposure and benefits advertisers. To sustain ad success, maintaining user engagement is crucial.

Final Thoughts

Meta is a major social media player with a vast user base and a focus on innovation and emerging tech like Oculus VR and Portal devices. It has diverse revenue streams including e-commerce, payments, gaming, and cloud services, making it an attractive choice for growth investors in the upcoming bull market.

Moreover, the stock has outpaced the S&P 500 in 2023, and its upward trend may lead it to surpass its 2020 peak. Compared to Nvidia and other AI stocks, it offers value and potential for investors despite short-term volatility.

The market appears to have forgotten about the company’s push into the metaverse. That’s a good thing. So long as investors continue to focus on the company’s solid cash flow producing machine, and recognizes that anything that comes from the metaverse is cream, this will be a stock no one will be selling anytime soon.

On the date of publication, Chris MacDonald has a LONG position in META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.