Social media giant Meta Platforms, formerly known as Facebook, has the potential to become a $2 trillion stock by 2030, according to recent analysis by The Motley Fool. While Meta’s current value is largely based on its core platforms, Facebook and Instagram, the company is set to capitalize on several growth opportunities in the coming years.
Meta’s founder and CEO, Mark Zuckerberg, has a history of playing the long game, focusing on growing and perfecting products before monetizing them. This approach has paid off in the past, as demonstrated by the success of Instagram, which was acquired for $1 billion in 2012 and remained ad-free for several years. Now, with the recent introduction of monetization features such as verification checkmarks and video product Reels, Instagram is poised to contribute significant profits to Meta’s bottom line.
Another growth lever for Meta is its messaging app WhatsApp, which was acquired for nearly $22 billion in 2014. Despite being free for users for years, Meta has started deploying ads that users can click through to WhatsApp, generating nearly $2 billion in annual revenue as of Q3 2022. With an estimated 2.7 billion users worldwide, WhatsApp’s continued monetization has the potential to further boost Meta’s earnings.
Additionally, Meta recently launched Threads, a platform similar to Twitter, and gained over 30 million users within a day. With social media being a popular and engaging form of online interaction, the success of Threads indicates Meta’s ability to compete in this space. Combined with the growth of Reels and WhatsApp, these opportunities position Meta for significant expansion over the coming years.
To project Meta’s potential valuation in 2030, analysts estimate an average earnings growth of 22% annually for the next three to five years, followed by 10% annual growth for the subsequent four years. Applying various earnings multiples, the stock could trade between $635 and $952 per share, resulting in a market cap ranging from $1.6 trillion to $2.4 trillion.
While such a valuation would be unprecedented, Meta’s current market cap of $750 billion and its price-to-earnings ratio (P/E) of 25 indicate a favorable starting point for projecting future growth. Investors who have confidence in Zuckerberg’s abilities and Meta’s long-term prospects may consider buying and holding shares to potentially benefit from the company’s expansion over the next decade.
In summary, Meta Platforms has the potential to become a multi-trillion-dollar stock by 2030, driven by the monetization of platforms like Instagram and WhatsApp, as well as the success of new offerings like Threads. With billions of potential users and a proven track record of patient growth, Meta presents compelling opportunities for investors looking to capitalize on the future of social media.
