Is Meta Stock Still A Buy After Going All In On AI? 3 Bullish Signals You Can’t Ignore

When it comes to digital dominance, few companies rival Meta Platforms (META). With over 3 billion daily users across Facebook, Instagram, and WhatsApp, it is using artificial intelligence (AI) to boost nearly every part of its business.

This includes areas like advertising, content recommendations, messaging, AI chat tools (like Meta AI), and even future AI-powered devices like smart glasses.

Despite broader macroeconomic headwinds, Meta kicked off fiscal 2025 with strong earnings and a better than expected outlook for Q2.

Operating margins rose to 41%, thanks to resilient ad spending and advanced AI-driven targeting that continues to draw budget away from smaller rivals like Snap.

Still, challenges remain, from ongoing losses in its Reality Labs division to heavy capital expenditures and persistent regulatory scrutiny.

But Meta’s wide economic moat, strong cash flows, and leadership in digital ads and AI keep it well positioned for long term growth.

So is Meta just another ad-driven tech stock, or an AI-enabled giant reshaping the future of digital commerce?

Let’s break it down using the Invest Diva Diamond Analysis (IDDA) Framework:
Capital, Intentional, Fundamental, Sentimental, and Technical.

IDDA Point 1 & 2: Capital & Intentional

Before investing in Meta Platforms (META), ask yourself:
✅ Are you looking for a tech leader with a stronghold in digital advertising and unmatched global reach?
✅ Do you believe in the long-term potential of AI to drive monetization and shape the future of online platforms?
✅ Are you comfortable with the high capex and ongoing losses in projects like Reality Labs as the company invests in long-term innovation?

Meta isn’t just a social media company, it’s one of the world’s most powerful digital ad machines, with over 3.4 billion daily active people and a growing ecosystem of AI-enhanced tools. While other platforms are still finding their footing, Meta continues to show it can monetize engagement faster and more effectively than most.

Meta also comes with risks: rising capital expenditures, Reality Labs’ multi-billion dollar losses, and increasing regulatory scrutiny all add pressure. 

However Meta’s core business is highly profitable, and its AI-driven ad targeting continues to outperform peers even during macroeconomic slowdowns. Its strong balance sheet, aggressive share buybacks, and innovation in both consumer AI and advertising tech position it well for future growth.

If you’re building a portfolio that leans into tech, network effects, and the evolution of AI, Meta could be a compelling long-term play.

Just know: Meta should not be viewed as a “set it and forget it” dividend stock. It’s a dynamic bet on the future of AI, digital advertising, and how billions of people interact online.

META is for bold investors who see volatility as opportunity and want exposure to one of the most influential companies of the digital age.

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IDDA Point 3: Fundamental

🔹One of Meta’s biggest moneymakers is digital advertising and it’s getting even better with AI. Meta’s smart algorithms are helping advertisers reach the right people with the right message, without needing a huge team or tons of content. In fact, Meta says businesses can now just tell them what they want to achieve, and their AI can handle targeting, creative, and tracking results. This means Meta is likely to continue growing ad revenue as more companies shift their marketing online.

🔹AI is also helping Meta increase user engagement. Time spent on platforms like Facebook, Instagram, and Threads has gone up thanks to better content recommendations. In countries like Thailand and Vietnam, Meta is also making strong gains with business messaging especially through WhatsApp.

On the technology side, Meta is investing in advanced AI tools (like their Llama models) and planning for the future of devices like smart glasses that could one day replace smartphones. CEO Mark Zuckerberg believes AI glasses will be as common as phones in the next 5 to 10 years.

🔹Recent earnings beat expectations with EPS of $6.43 (vs. $5.21 expected), driven by strong performance in its ad business. Notably, price per ad grew 10% YoY, outpacing a 5% growth in ad impressions, signaling that advertisers are paying more for Meta’s increasingly targeted and effective AI-powered ads. Despite a strong core business, the loss-making Reality Labs division remains a concern. Still, Meta’s stock trades at only 23x FY2026 EPS estimates and 20x FY2027 EPS, relatively modest for a company with this level of growth and innovation.

🔹Meta remains well-capitalized despite increasing its capital expenditures (capex) significantly. The company has raised its 2025 capex guidance to a range of $64B to $72B, driven by investments in AI infrastructure and Reality Labs. While Meta’s Free Cash Flow (FCF) has declined from $12.5B to $10.3B YoY, it still has sufficient cash reserves and cash-generating power to support its initiatives. The company also repurchased $13B in shares in the most recent quarter, demonstrating a shareholder-friendly capital allocation strategy. However, the over $15B annualized loss from Reality Labs continues to weigh on profitability and capital efficiency.

🔹Meta’s strategic direction is clear: dominate AI monetization through its unmatched user base and advertising platform. With the launch of a standalone AI app and plans to surpass 1 billion Meta AI users in 2025, Meta is leveraging its platforms to drive mass adoption. While its Llama AI model isn’t leading in benchmark rankings, Meta’s intentional focus on seamless user integration and monetization tools gives it a practical edge over technically superior models.

🔹Meta has implemented layoffs in 2025, affecting approximately 3,600 employees, which represents about 5% of its global workforce.  This move is part of a broader strategy to enhance performance standards and streamline operations, particularly as the company intensifies its focus on artificial intelligence (AI) and virtual reality (VR) initiatives. CEO Mark Zuckerberg emphasized the need to “raise the bar on performance management,” indicating that the layoffs targeted employees with lower performance ratings.  The affected employees were notified in early 2025 and were offered severance packages consistent with previous layoffs. These layoffs are part of Meta’s ongoing efforts to optimize its workforce and allocate resources more effectively toward its AI and VR projects. The company has indicated plans to refill some of these positions later in the year, aligning with its strategic priorities.

Fundamental Risk: Medium

IDDA Point 4: Sentimental

Strengths:

✅ Ad Dominance & Efficiency
Meta’s ad platform continues to deliver superior return on ad spend (ROAS), attracting advertisers away from smaller platforms like Snap and Pinterest, especially during downturns when every marketing dollar counts.

✅ AI-Powered Targeting
Significant investments in AI have boosted content recommendation and ad targeting, leading to stronger engagement and better monetization across Facebook, Instagram, and WhatsApp.

✅ Massive User Base & Ecosystem
With over 3 billion daily users and a growing portfolio of services (including Threads and business messaging tools), Meta has deep network effects and unmatched reach.

✅ Strong Financials
Meta boasts healthy margins (41% operating margin in Q1 FY25), robust free cash flow, and an ongoing share buyback program—all signaling financial strength and shareholder focus.

✅ Future Monetization Opportunities
AI tools, messaging apps (like WhatsApp Business), and even the metaverse (via Reality Labs) offer long-term growth optionality that’s still underappreciated by the market.

Risks:

❌ Reality Labs Losses
The metaverse division continues to burn billions annually with no clear timeline for profitability, raising questions about capital allocation.

❌ Regulatory Pressure
From antitrust scrutiny to data privacy regulations (especially in Europe), Meta faces ongoing legal and political headwinds that could limit future growth or increase costs.

❌ Ad Market Sensitivity
Despite its strength, Meta is still highly dependent on digital ad revenue (around 97% of total income). Any significant disruption or slowdown in global ad spend would directly impact its bottom line.

❌ Reputation & Trust Issues
Public trust in Meta remains mixed due to past controversies around data misuse, misinformation, and mental health concerns, potentially affecting user growth and advertiser perception.

❌ High Competition

TikTok, YouTube, and emerging platforms continue to battle for attention and ad budgets, putting pressure on Meta to constantly innovate and retain engagement.

Market sentiment has turned increasingly bullish after Meta’s latest earnings beat. The stock has gained over 30% in recent weeks, and investors are buying into Meta’s AI monetization story. However, sentiment could shift if capex continues to balloon without clear returns or if Reality Labs continues to burn cash. Still, investor optimism is high, largely thanks to AI tailwinds and Meta’s dominant ad monetization engine.

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Sentimental Risk: Medium-High

IDDA Point 5: Technical

On the Weekly Chart:

🟢 Meta has been in a steady uptrend since 2023, indicating strong long-term bullish momentum.
🟢 The recent pullback tested the Ichimoku Cloud, which acted as a support zone followed by a solid rebound.
🟢 Candlesticks remain above the cloud, further reinforcing the bullish outlook.

On the Daily Chart:

🟢 The future Ichimoku Cloud is bullish, suggesting continued upward momentum.
🟢 The Tenkan line has crossed above the Kijun line, forming a golden cross which is another bullish signal.
🟢 Recent candlesticks have broken above the cloud, previously acting as a resistance zone, now serving as a new support zone.

Meta continues to show strong bullish momentum across both weekly and daily charts. On the weekly timeframe, the stock has been in an uptrend since 2023, with a recent pullback finding support at the Ichimoku Cloud before rebounding, keeping price action well above the cloud.

On the daily chart, bullish signals remain strong: the future Ichimoku cloud is trending upward, a golden cross has formed with the Tenkan line crossing above the Kijun line, and price has recently broken above the cloud, turning former resistance into new support.

Overall, the trend remains firmly bullish.

Investors looking to add Meta into their portfolio can consider the following buy limit entries:

📌 Current market price: 647.49 (High Risk – FOMO entry)

📌 615.56 (High Risk)

📌 576.17 (Medium Risk)

📌 537.80 (Low Risk)

Here are the Invest Diva ‘Confidence Compass’ questions to ask yourself before buying at each level:

1. If I buy at this price and the price drops by another 50%, how would I feel? Would I panic, or would I buy more to dollar-cost average at lower prices? (hint: this question also reveals your CONFIDENCE in the asset you’re planning to invest in).
   
2. If I don’t buy at this price and the stock suddenly turns around and starts going up again, will I beat myself up for not having bought at this level?

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals

Technical Risk: Medium

Final Thoughts on Meta

Meta kicked off 2025 strong, beating earnings expectations with 41% operating margins and resilient ad revenue. Its AI-powered ad targeting and content recommendations are delivering higher ROAS, while competitors like Snap lag behind. Smart investors aren’t ignoring these 3 bullish fundamentals: Meta’s growing AI monetization, unmatched ad scale, and wide customer base, followed by 3 key technical signals: a breakout above resistance, strong volume confirming the uptrend and bullish future Ichimoku cloud. 

➡️ Recommendation: Buy or Hold / Medium Risk Asset – For medium risk tolerance investors with a long-term vision, Meta Platforms (META) offers strong growth potential through its dominant global presence, AI-driven ad innovation, and solid financials, including 41% operating margins.

While Reality Labs remains a cash drain and regulatory risks linger, Meta’s strong cash flow, wide moat, and leadership in performance marketing support long-term upside. This stock suits investors comfortable with short-term volatility who believe in AI and digital monetization and can consider using pullbacks as entry points depending on their risk tolerance and goals. 

Overall Stock Risk: Medium

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