Daily Update: Meta and Microsoft Experience Significant Growth at Morning's Start
In the world of tech, analysts and market forecasts are predicting that Meta Platforms (META) will outperform the S&P 500 over the next five years. This optimistic outlook is primarily driven by strong AI-related growth, solid earnings performance, and increasing revenue.
Benchmark recently raised Meta's price target to $800, citing steady revenue growth of approximately 19.4% in the last 12 months and strategic investment in AI infrastructure. The company maintains a "Buy" rating. Wall Street consensus among 54 analysts strongly favours Meta, with an overall "Strong Buy" rating. Price targets average around $825, with some as high as $1,086, implying potential upside of approximately 40% from current prices.
Meta's Q1 2025 revenue rose 16% year-on-year, and EPS jumped 37%, surpassing economists' expectations. The company is pivoting from metaverse towards AI, leveraging AI to enhance core platforms like WhatsApp and Threads, contributing to user growth and engagement.
Meta's market cap (~$1.96 trillion as of mid-2025) could reach $3 trillion by 2029 if annual growth of over 12% continues. Meta's valuation at roughly 30 times earnings is comparable to the S&P 500, but Meta's 10-year stock price gains (719%) hugely surpass S&P 500 gains (~203%), supporting its potential to outperform broadly.
However, this outlook is subject to risks inherent in tech sector investments, market volatility, and execution uncertainties, especially regarding Meta's future in AI and the metaverse. But given the current market sentiment and analyst consensus, Meta Platforms is broadly expected to deliver superior returns relative to the S&P 500 index during this period.
Meanwhile, in the business world, several companies are set to report their earnings. Roblox is expected to have an adjusted loss of $0.38 per share. Amazon, which has beaten EPS estimates for the past four quarters, is also set to release results after the market closes. Apple is set to report quarterly earnings after the closing bell, and a $350 billion fund has been set up by South Korea for U.S.-driven investments.
Interestingly, the U.S. announced a 50% tariff on copper products, but new tariffs exclude copper as a raw material but include semi-finished products such as pipes and wires. This decision marks a reduction from the 25% levels threatened earlier, signifying a possible easing in trade tensions.
In another development, the U.S. agreed a trade deal with South Korea, with S&P futures rising over 1% as a result. The agreement is expected to boost trade and investment between the two countries.
As the market opens, Roblox reports are expected, followed by Amazon and Apple's earnings later in the day. The tech sector continues to be a dynamic and intriguing space to watch.
Investors might consider allocating a portion of their money towards Meta Platforms (META), given Benchmark's increased price target of $800 and Wall Street's strong consensus of a "Strong Buy" rating, with some price targets reaching as high as $1,086. This optimistic outlook is built on the company's strategic investment in AI infrastructure, solid earnings performance, and increased revenue.
Moreover, technological advancements in AI and the metaverse are expected to drive Meta's future growth, potentially outperforming the S&P 500 index over the next few years. However, investors should be mindful of the inherent risks in tech sector investments and factor in market volatility and execution uncertainties when making their investing decisions.
