Meta Ranks Among Leading S&P Performers Today. Reasons Behind the Social Media Giant's Rally.

Main Insights

• Meta Platforms surpassed analyst expectations in all key areas, reflecting the positive impact of its investments in artificial intelligence. The company also provided first-quarter projections that were higher than market forecasts.

• This strong performance sparked enthusiasm among investors, sending Meta’s stock to its highest levels since 2026.

Among the so-called Magnificent 7 tech giants, Meta Platforms stands out as the only one currently living up to its reputation.

Following the release of its fourth-quarter earnings, which exceeded Wall Street’s predictions, Meta’s shares surged over 9% on Thursday, reaching new highs for the year. This performance highlights the effectiveness of Meta’s AI initiatives.

Investors responded positively to the news, making Meta (META) one of the top performers in the S&P 500. It was the only member of the leading seven U.S. tech companies to see gains, while others—Nvidia (NVDA), Alphabet (GOOGL), Microsoft (MSFT), Amazon (AMZN), and Tesla (TSLA)—mostly declined, and Apple (AAPL) managed only modest increases.

Significance for AI Investors

Meta’s recent earnings have reignited confidence in the AI sector, demonstrating that substantial investments in artificial intelligence can deliver tangible results in the short term.

The company’s strong outlook has prompted analysts to issue favorable reports and raise their price targets, citing Meta’s success in boosting user engagement and revenue through machine learning. All 24 analysts tracked by Visible Alpha currently recommend buying the stock, with an average price target of $868—about 20% above current levels.

CEO Mark Zuckerberg commented during a recent earnings call, “We’re balancing new initiatives with significant investment in AI to enhance both the quality and performance of our core apps and businesses.”

For the fourth quarter, Meta reported earnings per share of $8.88, surpassing Visible Alpha’s estimate of $8.24. Revenue reached $59.9 billion, exceeding expectations of $58.4 billion. The company’s revenue forecast for the current quarter, ranging from $53.5 billion to $56.5 billion, also topped analyst predictions. Meta plans to introduce several new AI models and products throughout the year.

According to a report from Wedbush analysts Scott Devitt and Dan Ives, “Meta has the opportunity to monetize its AI assistant, Meta AI, across various applications, including business AI agents, enhanced automation for advertisers, and deeper integration of generative AI into Meta’s hardware.” The team increased their price target for Meta’s stock to $900, up from $880.

Analyst Optimism and Growth Potential

Meta’s advancements in AI and its upcoming product launches are fueling positive sentiment among analysts, who see strong growth prospects based on the latest quarterly results. The company’s AI assistant, Meta AI, is now available in multiple languages and integrated across Facebook, Instagram, WhatsApp, and Ray-Ban smart glasses, serving over one billion monthly active users.

Brian Nowak and his team at Morgan Stanley noted that Meta’s improvements in user engagement and revenue generation during the fourth quarter, along with its commitment to further progress, give them confidence in accelerating revenue growth. They raised their price target to $825 from $750. Jefferies analysts also increased their target, now projecting $1,000 per share—up by $90.

Meta’s capital expenditure guidance for this year is between $162 billion and $169 billion, exceeding the consensus estimate of $151 billion. Despite the higher spending, investor reaction has been overwhelmingly positive, signaling approval of Meta’s strategic direction.