Meta Platforms (NASDAQ:META) stock differentiates itself in the U.S. market with its emphasis on artificial intelligence and the metaverse.
Its involvement in machine learning technology and generative AI sets it apart for future innovations. Investors appreciate the company’s current valuation and recognize its successful strategies of reinvesting in platforms like Instagram and implementing cost-cutting measures.
In this article, let’s discuss why Meta stock is still the top mega-cap technology play to consider buying right now.
Recent News on META Stock
The top 10 investors in Meta have experienced a significant financial gain, with their holdings increasing by nearly $200 billion this year. Founder Mark Zuckerberg alone saw a gain of over $60 billion in his shares.
Several investors strategically purchased additional shares ahead of Meta’s successful launch of the Threads platform, including JP Morgan Asset Management, T. Rowe Price, and Arrowstreet Capital. These firms acquired more than 4 million additional shares each.
JP Morgan Asset Management significantly increased its stake in Meta, acquiring 11.4 million additional shares, representing an 82% increase in its holdings. This is noteworthy considering the firm already held 1% of the outstanding shares.
Similarly, T. Rowe Price, a larger shareholder with 1.7% of the outstanding stock, added 6.6 million more shares, reflecting a 17% increase during the March reporting period.
META’s Valuation
Meta Platforms has transformed into a global communication and information powerhouse since its establishment in 2004. Its stock has shown impressive growth since its IPO in 2012, making it an appealing choice for investors.
With a strong financial standing, Meta Platforms exhibits robust profitability and growth trends, boasting a high gross margin of 78.4% and a net margin of 18.27%, outperforming industry averages.
Meta Platforms has shown impressive three-year revenue growth of 20.6%, surpassing the industry average. The company is expected to continue its growth trajectory with a higher total revenue growth rate.
Meta’s shares are deemed undervalued when compared to its peers, making it an attractive choice for investors looking for undervalued tech stocks in 2023.
What Makes Meta Strong in the Market
While past performance doesn’t guarantee future results, Meta Platforms’ track record is notable.
Investors have compelling reasons to consider investing in Meta stock, as the company’s focus on the metaverse suggests opportunities for growth in various sectors like entertainment, commerce, and social interaction within virtual realms.
Despite facing challenges such as privacy concerns, regulatory scrutiny, and advertising boycotts, Meta has shown resilience in maintaining its user base and revenue streams.
The company’s financial performance remains strong and stable, with a solid balance sheet and positive cash flow. In Q1 2023, Meta recorded a revenue of $28.65 billion, marking a 3% year-over-year increase.
Meta Platforms achieved a net income of $5.7 billion, representing a 23.52% YoY growth. Additionally, its operating cash flow increased by 15.22% to $7.227 billion.
With total assets of $184.491 billion and total liabilities of $59.696 billion, Meta maintains a favorable debt-to-equity ratio of 0.08. These financial figures demonstrate Meta’s resilience and its capability to navigate through short-term market fluctuations.
On the date of publication, Chris MacDonald has a position in META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.