Wall Street is closely monitoring Meta Platforms (META) for its aggressive moves in the artificial intelligence (AI) sector and its dominant position in digital advertising. The tech giant's early investments in AI infrastructure are seen as a powerful engine for long-term growth, with some analysts even setting extremely high target prices of $650 to $800 per share.
In the past year, Meta's revenue grew by 23% year-over-year, reaching $156.23 billion. At the same time, its operational efficiency has been impressive, with a return on equity as high as 36% and a return on invested capital reaching 27%. The market is generally optimistic about Meta's future growth momentum, expecting revenues for fiscal years 2024 and 2025 to increase from $134.9 billion to $186.3 billion, with GAAP operating income significantly rising from $46.8 billion to $74.2 billion.
In the AI field, Meta is rapidly accelerating the construction of its computing infrastructure, planning to expand its GPU count to over 2.5 million in the next two to three years. This expansion aims to support Meta's AI-driven tools, including its AI assistant, which has reached 500 million monthly active users. Meta's open-source AI strategy has attracted significant attention from industry insiders, such as Brendan Eich, the executive chairman of Brave, who believes this will further solidify Meta's leadership in AI and spatial computing technologies.
Despite the promising outlook, Meta faces pressure on profit margins in the short term. To accelerate its AI initiatives, Meta has had to significantly increase capital expenditures and related investments, leading some analysts to lower the company's profit expectations for fiscal year 2025. However, Meta's advertising revenue from platforms like Reels remains strong, as these platforms utilize AI and recommendation technologies, consistently generating substantial income for Meta and reflecting its excellent financial performance.
