If I had invested £10,000 in Meta stock at the beginning of 2024, this is what I would currently own.

 If I had invested £10,000 in Meta stock at the beginning of 2024, this is what I would currently own.

After examining Meta stock's year-to-date performance, our writer decides if he would consider purchasing this outstanding tech share.

If I had invested £10,000 in Meta stock at the beginning of 2024, this is what I would currently own.

Indeed, the social media behemoth's market capitalization has skyrocketed to $1.28 trillion since my last article about it in early 2024.

Regretfully, I have never held stock in Meta (previously Facebook). Since going public in May 2012, they have increased by 1,218%. Would I then think about purchasing some today?

large gains

A Meta share cost $353, as of the beginning of 2024. It is currently $504. That equals a staggering 42.7% return, crushing the 14.7% return on the S&P 500 (not including dividends).

That implies that a £10k investment made at the beginning of the year would now have a paper value of £14,270.

Since the company announced in February that it will begin paying quarterly dividends, there would also have been a tiny payout, just enough to buy some milk and bread.

Although Meta's initial return of 0.4% may seem low, I believe the company has the potential to significantly increase its payouts in the long run.

The Guardian claims that because he owns 350 million Meta shares, founder and CEO Mark Zuckerberg may earn $700 million (£549 million) in revenue in the first year. That is definitely not money for bread and milk!

If I had invested £10,000 in Meta stock at the beginning of 2024, this is what I would currently own.

Growth is ongoing

To $36.4 billion in Q1 ended March 31, Meta's revenue increased 27% year over year. Ad impressions climbed by 20%, yet the average cost per ad increased by 6%. It produced an enormous free cash flow of $12.5 billion, compared to $6.9 billion the previous year.

By no means are Facebook, Instagram, and WhatsApp becoming less popular. Indeed, the number of daily active users rose by 7%, reaching an astounding 3.24 billion. That is almost half of all people on Earth!

One problem was that, compared to the initial forecast of $30–37 billion, capital expenditures for 2024 are expected to reach $35–40 billion. Growing investments in artificial intelligence (AI) are the cause.

This report caused a 16% decline in the stock. But since then, it has recovered those losses and added an additional 2%.

Chinese internet purchases

Temu, an online marketplace, was apparently Meta's biggest advertiser in 2023. The company threw $2 billion at digital advertisements on Facebook and Instagram to target consumers in the West and beyond. Shein was also one of the biggest purchasers of advertising.

The issue here is that a reduction in spending by Chinese advertising may have an effect on Meta's ability to grow its earnings. It is imperative, in my opinion, to remember this.

Nevertheless, more Chinese marketers should be encouraged to go global to reach new markets as the country's e-commerce sector matures. With 82% of all social media ad investment going to Meta, it is in the sweet spot.

Worth purchasing for me?

Analysts predict that within the next several years, the company's earnings will increase by about 19%. And that is even if its cash-draining Reality Labs metaverse unit is dragging on earnings!

In terms of pricing, we are thinking about a forward price-to-earnings (P/E) ratio of 24.5. This is similar to other Magnificent Seven stocks such as Tesla (64), Microsoft (37.1), Nvidia (48.1), and Amazon (39.3).

In the long run, Meta seems to be in a very strong position in AI. It has an incredible amount of data, which gives it a significant edge in using and training AI systems. For example, these can assist advertisers in making the most of their marketing budget.

I would gladly add Meta stock to my portfolio in June if I had more money to invest.

Is it the right moment to buy £1,000 worth of Meta Platforms?

It pays to listen to financial guru Mark Rogers when he offers a stock recommendation. After all, he has been sending out top stock recommendations from the US and UK markets to thousands of paying subscribers of his flagship Motley Fool Share Advisor newsletter for almost ten years.

Furthermore, according to Mark, there are currently six exceptional stocks that buyers ought to take into account. Do you want to know if Meta Platforms was included?

If you decide to invest, your capital is at risk and the value of your investment could increase or decrease. It is best to evaluate your unique situation before making any investments. Think about seeking out independent financial guidance.