Where is Meta Platforms (NASDAQ:META) stock headed next? No one has a crystal ball that can consistently predict asset price moves. However, as Meta Platforms expands its presence and influence as a social media giant, the short sellers need to get out of the way or get steamrolled.
Meta Platforms’ market capitalization isn’t $1 trillion right now, but that’s a milestone for Meta’s investors to look forward to. So, let’s talk about why Meta Platforms’ loyal shareholders are on the right side of the trade.
A Bullish Call for META Stock
As I discussed previously, Morgan Stanley analyst Brian Nowak recently assigned an “overweight” rating and a $375 price target to META stock. I fully concur with that assessment and feel that META reaching $375 is only a matter of time.
Based on untapped revenue opportunities from Facebook’s Reels feature (which is similar to TikTok), Nowak expects Meta Platforms’ earnings to increase to $20 per share by 2024. I agree that Reels will be a robust revenue generator for Meta Platforms. However, let’s not leave Meta’s WhatsApp social media platform out of the conversation.
Soon, Meta Platforms plans to expand the WhatsApp Channels feature to more than 150 countries. As Reuters explains, Channels is a “broadcast service that enables” WhatsApp users to “receive private updates from celebrities, sports teams and thought leaders.” Expanding the Channels feature is a savvy way to increase user engagement on WhatsApp.
Another notable development is that, according to a Financial Times report, a WhatsApp spokesperson “did not dispute that the idea” of putting ads in WhatsApp “had been discussed.” On the other hand, Meta Platforms reportedly denied that it’s planning to place ads in WhatsApp.
However, I expect that Meta will include advertisements in WhatsApp sooner or later. It’s too good of a revenue-generating opportunity for the company to pass up.
Americans Are Spending Big Bucks on Social Media
This discussion about Meta Platforms’ opportunities with Reels and WhatsApp would be moot if Americans weren’t actually spending money on social media. After all, these social media platforms are specifically designed to get the users to engage with their wallets.
Fortunately for Meta Platforms and its stakeholders, people in the U.S. are, indeed, spending money on social media apps. Believe it or not, a recent survey found that 48% of users on social media have made an impulse purchase within the past 12 months.
Also during that timeframe, the survey revealed that Americans spent a whopping $71 million on social media impulse purchases. Furthermore, the average impulse buyer on social media spent $754.
Who spends more on social media purchases, men or women? I’ll bet you answered that question incorrectly. The survey found that, on social media during the past 12 months, women spent $518 on average while men spent $999.
Consequently, Meta Platforms has a gigantic financial pie that it can take a piece of. Clearly, Americans aren’t reluctant to open up their wallets and spend on social media. So, even with persistent inflation and high interest rates, Meta Platforms should still be able to capitalize on people’s spending habits.
META Stock: $375 Is Just a Stepping Stone
Between Facebook, Reels, Threads and WhatsApp, Meta Platforms is a contender for the title of U.S. social media champion. Americans are freely spending money on social media. Hence, Meta Platforms’ market cap is likely to expand during the coming months and years.
Where will META stock be when Meta Platforms’ market cap inevitably reaches $1 trillion? I’m thinking $375 or higher. Then, it’s just a question of how much higher it will go.
Is $450 the next resistance level, or maybe even $500 within the next year? Whichever price target you choose, just hold your Meta Platforms shares and prepare for steady long-term gains.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.