Meta Stock Price Guide: What Drives Meta’s Share Price?

With a proven track record and ownership of various different ventures, Meta (META) is arguably one of the most recognisable names in the global tech industry, and as such may be a compelling prospect for traders looking to get into share CFDs. Let’s take a look at Meta’s business fundamentals as well as the factors affecting its underlying share value:

TL;DR

• Meta, from its founding in a Harvard dorm, has evolved into a dominant force in global technology, managing platforms like Facebook and Instagram.
• The company's core revenue comes from advertising.
• Despite regulatory challenges, Meta's IPO in 2012 raised $16 billion, valuing it at $104 billion, highlighting its growth under founder and CEO Mark Zuckerberg.
• Meta's market cap milestones include reaching $1 trillion in July 2021 and then again in early 2024 after a steep decline over the intervening years.
• Analysts foresee strong revenue growth and AI leadership driving Meta's positive market outlook, despite competitive pressures and regulatory scrutiny.

Meta Explained: What Is Meta?

Meta, a pivotal player in global technology, holds a compelling history—from its inception in a Harvard dorm to its current dominance in the social media sphere. Understanding this journey is crucial for traders considering Meta share CFDs.

Headquartered in the Bay Area, Meta manages a suite of platforms including Facebook, Instagram, Threads, and WhatsApp, solidifying its position alongside tech giants like Apple (AAPL) and Microsoft (MSFT).

Meta's acquisitions, such as wearable technology pioneers Oculus and CTRL-Labs, bolster its portfolio, while ventures into hardware like Meta Portal and Ray-Ban Stories complement its core revenue source—advertising, which constituted the vast majority of income in 2023. The rebrand to Meta Platforms in 2021 signalled a strategic move toward the metaverse, expanding beyond social media into virtual and augmented reality.

The firm's landmark initial public offering in 2012 raised $16 billion, valuing the company at $104 billion and affirming its status as a tech powerhouse under founder and CEO Mark Zuckerberg's leadership. Despite challenges like regulatory scrutiny and competitive pressures, Meta persists in advancing AI and metaverse initiatives, critical for traders monitoring its market performance.

Meta’s Market Cap Milestones

Over the past twelve years, Meta’s market capitalisation has been on a steep upward trajectory. Let’s take a look at a few of the milestones this key tech firm has reached:

Meta has recently achieved significant milestones in its market capitalization history:

• May 2012: Meta’s journey as a publicly-traded company begins at $63.14 billion
• October 2017: Market cap reaches above $500 billion
• July 2021: The firm’s market cap reaches $1 trillion for the first time
• November 2022: A months-long decline brings Meta’s market cap to below $250 billion
• January 2024: Recovering from the aforementioned drop, market cap returns to $1T

Have Meta Shares Ever Undergone a Stock Split?

As of June 2024, Meta Platforms, as opposed to other successful American firms like Amazon (AMZN) and Tesla (TSLA), has never made the move to split its stock. Meta's decision not to split its stock reflects its strategy to maintain a higher share price, which could influence its eligibility for inclusion in certain indices and appeal to institutional investors. Notably, Zuckerberg considered a stock split for Facebook, the firm’s previous name, in 2016 but ultimately withdrew the proposal in 2017.

Meta's stock has delivered substantial returns since its IPO, outpacing the S&P 500's total return over the same period. The company has focused on financial efficiency and achieving significant revenue and earnings growth, bolstered by its strong balance sheet and shareholder return initiatives such as share repurchases and dividends.

While the possibility of a stock split remains speculative, investors should prioritise evaluating Meta's financial performance and strategic direction rather than solely anticipating a split for investment decisions. Management's guidance and the company's performance in areas like virtual reality and augmented reality will likely continue to influence market sentiment and shareholder value moving forward.

In conclusion, while Meta has not split its stock historically, its share price trajectory as well as the precedents set by other related companies may lead to a sea change in this policy in the future.

Where Are Meta Shares Listed?

Meta shares are listed on the tech-heavy, New York City-based Nasdaq (US-TECH 100).

What Are Meta’s Trading Hours?

Meta shares can be traded on the Nasdaq from 9:00 to 16:00 EST, Monday to Friday.

What Factors Can Impact Meta Share CFD Prices?

Meta’s share price, like those of other publicly-traded companies, may be subject to effects stemming from a variety of sector-specific factors. One significant determinant of Meta's price trajectory and trends is user growth and engagement across the various platforms it operates. The company's performance hinges on the number of active users, their demographics, and engagement levels. Changes in these metrics can strongly influence investor sentiment and consequently impact Meta’s stock price.

Advertising revenue constitutes the most vital revenue stream for Meta, making it susceptible to shifts in ad policies, the effectiveness of ad targeting algorithms, competition from other platforms, and broader economic conditions. The company's financial performance, including sales figures, profitability, and margins, also plays a pivotal role in shaping its stock price. Meta’s earnings reports, especially during quarterly earnings seasons, are eagerly anticipated events that provide insights into its financial health and future prospects. Positive earnings surprises often buoy the stock, whereas disappointing results can lead to declines.

The dynamics of intra-industry dynamics are another critical factor that must be accounted for. Meta faces fierce competition from tech giants across multiple sectors such as social media, messaging services, virtual reality, and digital advertising. Evaluating Meta's market share relative to competitors like Alphabet (GOOG), Twitter, and Snapchat (SNAP) is essential for understanding its competitive position and potential impact on its stock performance.

Innovation and product development are central to Meta’s strategy for sustainable growth. The company’s ability to innovate and introduce compelling new products and features that attract and retain users is closely scrutinised by investors. For instance, Meta's successful transition to mobile-friendly ad formats and advanced targeting capabilities in the early 2010s significantly bolstered its revenue and investor confidence. Monitoring Meta’s investments in research and development and its responsiveness to evolving consumer preferences and technological trends is crucial.

The regulatory environment poses additional challenges. Meta must navigate regulatory scrutiny, privacy laws, antitrust concerns, content moderation requirements, and governmental regulations that can significantly affect its operations and financial performance. Changes in regulatory policies can introduce volatility into Meta’s stock price, reflecting investor concerns over compliance and potential business disruptions.

In summary, Meta’s share price is subject to the interplay of user metrics, advertising revenue, financial performance, competitive pressures, innovation capabilities, and regulatory developments. Understanding these dynamics is essential for investors seeking to gauge Meta’s resilience and growth potential in a rapidly evolving technology landscape.

While in this article we look at what affects the price of Meta’s traditional shares, it is important to recognise the distinction between those and share CFDs. When trading CFDs, you do not own the underlying Meta share and therefore do not have the rights or responsibilities of a traditional shareholder. Furthermore, since trading CFDs involves the use of leverage, the risks of significant financial losses must be taken into account.

Meta Stock Price Predictions

Making forecasts as to the future value of Meta shares, both over the near- and the long-term, is difficult owing to the complex nature of the various interlocking factors affecting the market as a whole and the technology sector and Meta as a firm in particular.

One of Meta’s key strengths lies in its vast global user base, providing substantial opportunities for monetization across its platforms. This extensive reach allows Meta to leverage its advertising capabilities and enhance revenue streams, particularly as it continues to optimise operations through AI technologies. AI not only improves content moderation and user engagement but also facilitates targeted advertising, bolstering Meta’s competitive edge in digital marketing.

Moreover, Meta’s ventures into virtual reality (VR) and the metaverse represent significant long-term growth prospects. These innovations could redefine social interaction and digital experiences, opening new avenues for revenue generation beyond traditional social media platforms.

However, Meta faces notable challenges. The preference of younger demographics for platforms like Snapchat and TikTok poses a risk to its user acquisition and retention strategies. Regulatory scrutiny and antitrust actions further add to uncertainties, potentially impacting Meta’s operational freedom and market competitiveness.

The high costs associated with research and development for the metaverse are another weakness. While promising for future growth, these investments currently strain profitability, requiring Meta to demonstrate sustainable returns from its ambitious technological ventures.

In terms of market outlook, analysts hold a positive stance on Meta’s performance. Full-year forecasts for 2024 suggest robust earnings growth, with projected revenue reaching $158.2 billion, marking a substantial annual increase of 17.3%. Analysts highlight Meta’s leadership in AI adoption, anticipating that these technologies will drive significant business expansion and innovation.

Some market experts hold bullish predictions for Meta, setting price targets of over $500, emphasising the company’s potential to outperform in the market. With an average price target of $517 among Wall Street analysts, optimism surrounding Meta’s future remains strong, underpinned by expectations of continued revenue growth and technological advancement.

Looking ahead to 2025, analysts foresee further revenue expansion to $178.1 billion, reflecting ongoing momentum and sustained market leadership in digital advertising and social networking. Despite these positive forecasts, analysts caution that Meta’s valuation may limit additional upside, urging vigilance in assessing risk versus reward at current price levels.

Ultimately, Meta’s ability to capitalise on AI advancements, navigate regulatory challenges, and innovate in emerging technologies will define its future trajectory. Investors should closely monitor these factors to make informed decisions amid evolving market conditions and competitive pressures in the tech industry.

Conclusion

In conclusion, Meta’s history of over a decade on the stock market can be read as a success story, with the firm becoming one of the most recognisable names in its sphere. Since 2012, its share price has seen various ups and downs as the executive suite’s business strategy has undergone various policy changes which have interacted with overarching economic forces for the better or the worse. WIth strong fundamentals as well as significant challenges, making strong predictions for where Meta shares will go in the future is exceedingly difficult, whether or not the company decides in the end to carry out a stock split.

Whichever way the markets move in the end, you can gain exposure to their shifts by trading CFDs on our Plus500 platform.

FAQs

Where are Meta’s shares listed?

Meta shares are listed on the Nasdaq exchange, specifically under the ticker symbol "META".

What is Meta's IPO date and price?

Meta conducted its initial public offering (IPO) on May 18, 2012, at a price of $38 per share.

Does Meta distribute dividends?

Yes, Meta began distributing dividends in 2023, marking a shift in its financial strategy to return value to shareholders.

How can I trade on Meta's shares?

You can trade CFDs on Meta shares by creating an account, getting verified, and using Plus500’s trading platform.

Who are Meta’s top shareholders?

BlackRock (BLK) and Fidelity (FIS) are among Meta’s top institutional shareholders.

Who are Meta’s main competitors?

Meta faces competition from major tech firms including Alphabet, Apple, Amazon, and Microsoft, as well as social media platforms like Snapchat and TikTok.

How many shares of Meta are available for trading?

As of the latest data, Meta has approximately 2.9 billion shares outstanding, which are available for trading on the public market.