Meta’s AI Focus Fuels 16-Day Stock Surge
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Meta Platforms (META) has achieved a historic milestone, with its stock rising for 16 consecutive trading sessions as of February 10, 2025.
This remarkable rally has resulted in a 17% gain since January 20, pushing Meta’s market capitalisation above $1.8 trillion.
The streak marks the longest winning run for any of the Nasdaq’s ‘Magnificent Seven’ companies and reflects growing investor confidence in Meta’s strategic direction, particularly its focus on artificial intelligence (AI) and advertising innovation.
What’s Driving Meta’s Surge?
The rally is fuelled by several key factors:
- AI Integration and Advertising Growth: Meta’s heavy investment in AI has transformed its advertising capabilities, allowing for better ad targeting and measurement. The company’s AI-powered Advantage+ shopping service grew by 70% in the last quarter of 2024, reaching a $20 billion annual revenue run rate. Analysts believe this innovation is giving Meta a competitive edge over rivals like TikTok and Alphabet.
- Strong Earnings Performance: Meta’s fourth-quarter earnings report exceeded expectations, with earnings per share jumping 50% to $8.02 and ad revenue increasing by 19% year-over-year to $39.9 billion. These results highlight the strength of its core business and its ability to monetise platforms like Instagram Reels.
- Market Positioning Amid AI Developments: Unlike competitors such as Microsoft and Alphabet, Meta is seen as more of a consumer of AI rather than a provider, which has insulated it from market disruptions like the DeepSeek-driven sell-off in January. Investors view Meta as uniquely positioned to benefit from advances in AI while maintaining its dominance in digital advertising.
- Favorable Political Climate: The inauguration of President Donald Trump has created optimism about a friendlier regulatory environment for tech companies, including potential tax cuts and reduced scrutiny, which could further boost Meta’s profitability.
Investor Sentiment & Future Outlook
Meta’s recent performance has solidified its standing among growth investors. Analysts remain optimistic about the company’s prospects for 2025, with price targets ranging from $336 (Goldman Sachs) to $753 (Citi).
Key drivers include continued AI integration, robust advertising demand, and new product developments such as Ray-Ban smart glasses.
However, challenges remain.
Meta plans to increase its AI spending by 50% in 2025, with capital expenditures projected at $60–65 billion.
While this aggressive investment strategy aims to maintain its technological leadership, it also raises questions about profitability if returns on AI spending take longer to materialise.
What This Means For Investors
Meta’s historic winning streak underscores the market’s confidence in its AI-driven growth strategy and resilience amid broader tech sector volatility.
For investors, the stock offers an attractive combination of innovation-led growth and strong financial performance.
However, with shares near all-time highs, potential risks include profit-taking or slower-than-expected returns from its massive AI investments.
As Meta continues to dominate the digital advertising space while expanding its AI capabilities, it remains a key player to watch in both the tech sector and broader financial markets.
Chart: MarketScreener