Meta's AI Strategy Drives Decade-Long Winning Streak
Meta Platforms Inc. (META) shares extended their remarkable rally on Friday, marking their 10th consecutive day of gains. This impressive streak represents the longest since September 2015 and has pushed the stock up by an impressive 13%.
The surge in Meta's share price follows a string of strong quarterly earnings reports that have instilled confidence among investors about the company's artificial intelligence (AI) strategy. Meta's utilization of AI to enhance ad targeting and user engagement has been a key focus, with investors betting on the company's potential to capitalize on the growing mainstream adoption of AI.
"Meta's execution has been exceptional, and there's significant optimism about AI's potential to transform the company," said Robert Pavlik, Senior Portfolio Manager at Dakota Wealth Management. "Targeted advertising remains a critical component of the industry, and Meta's AI capabilities give it a distinct advantage in this area."
In addition to the recent rally, Meta's shares have enjoyed significant growth in recent years, with a 65% surge in 2023 and a near tripling in 2022. Earlier this week, CEO Mark Zuckerberg hailed 2025 as a "major year" for AI, validating the company's commitment to invest heavily in AI infrastructure. This announcement offset concerns surrounding a slightly disappointing revenue forecast.
Meta's AI strategy received further validation with the launch of China's AI startup DeepSeek, an open-source AI model similar to Meta's own Llama. Despite their recent gains, Meta shares currently trade at a price-to-earnings ratio of 26, which is largely in line with the Nasdaq 100 Index.
"Given current trends, a multiple of 30 could be justified for this stock," said Pavlik, suggesting that shares could rise to $755 from their Friday close of $689.18.
As Meta's AI capabilities continue to evolve, the company is well-positioned to capture the opportunities presented by the growing AI market. This latest rally underscores the confidence investors have in Meta's ability to deliver on its AI strategy and drive long-term growth.