Is Meta a Smart Buy After 650% Surge? Unleashing Data and AI Potential
Is Meta Platforms Still a Smart Investment After Its 650% Surge?
In the realm of investing, few narratives have been as remarkable as the 650% surge of Meta Platforms (META) over the past decade. Emerging from the lows of 2020 to reach unprecedented heights by 2025, the company has evolved from a cautionary tale for metaverse skeptics into a formidable tech giant boasting a market capitalization of $2.8 trillion. However, as the excitement surrounding this rapid ascent begins to settle, a pivotal question arises: Should investors still consider Meta a viable option?
For those with a long-term perspective, the answer hinges on three key factors: Meta’s significant data advantage in artificial intelligence, its prudent capital management, and a valuation that remains attractive compared to its competitors. These elements indicate that Meta is not merely keeping pace in the AI race; it is actively defining its trajectory.
The Data Advantage: Meta’s Stronghold in AI
Meta’s real power lies not in its stock performance but in the robust data ecosystem it has cultivated. With 3.8 billion monthly active users across platforms like Facebook, Instagram, WhatsApp, and Messenger, Meta generates an immense volume of diverse data—ranging from text and images to videos and real-time interactions. This wealth of information serves as the foundational material for developing advanced artificial intelligence systems.
Take, for example, the Andromeda ads retrieval engine, which analyzes millions of ad options to deliver highly personalized results. This dual-purpose system not only fuels Meta’s impressive $140 billion annual advertising revenue but also enhances its AI models by utilizing actual user behavior. This creates a self-reinforcing feedback loop: as Meta gathers more data, its models improve in predicting user preferences, leading to more effective monetization.
Additionally, Meta has strategically bolstered its data capabilities through acquisitions. Its $14.3 billion investment in Scale AI, a leader in expert data labeling, ensures access to high-quality training data for sophisticated reasoning models. This move not only disrupts the AI data supply chain but also brings top-tier talent into Meta’s fold. The recruitment of Scale AI’s founder, Alexandr Wang, to spearhead a new “superintelligence” lab signals Meta’s commitment to pioneering the next generation of AI—systems capable of reasoning, planning, and autonomous action.
Capital Management: A Focus on Sustainable Growth
Meta’s adeptness in capital allocation has quietly fueled its growth. While its price-to-earnings (P/E) ratio of 28.85 may initially appear elevated, it is relatively modest compared to the NASDAQ 100’s P/E of 40.11 and Tesla’s PEG ratio of 3.9. When growth is factored in, Meta’s valuation becomes significantly more appealing.
Another noteworthy metric is Meta’s Return on Invested Capital (ROIC), which indicates that the company generates returns exceeding its capital costs. This is particularly crucial in an era where AI and metaverse initiatives demand substantial upfront investments. With a current liquidity ratio of 2.66, Meta is well-positioned to fund these projects without excessive debt.
Moreover, Meta has been strategic in its talent acquisitions. By bringing on board seven researchers from OpenAI and integrating the Fundamental AI Research (FAIR) team into Reality Labs, the company has created a cutting-edge research environment focused on product development. This approach represents not just expenditure but a calculated investment in future dominance.
Undervalued Among the Magnificent Seven: A Contrarian Perspective
Historically, Meta’s valuation has sparked debate. However, in 2025, it stands as the second-most affordable option among the Magnificent Seven tech giants, trailing only Alphabet. This positioning is no coincidence. While rivals like Apple and Amazon face regulatory challenges and stagnant growth, Meta is intensifying its focus on AI.
The company’s open-source strategy, exemplified by the Llama 3 model, further shields it from regulatory scrutiny. By promoting itself as a proponent of democratized AI, Meta aligns with favorable European antitrust sentiments, distancing itself from the challenges faced by closed-source competitors like OpenAI and Anthropic.
To illustrate, Meta’s Llama 3 model is available under permissive licenses, fostering a developer ecosystem that rivals those of Microsoft and Google. This ecosystem is not merely a cost center; it acts as a revenue enhancer. As more developers build on Meta’s AI infrastructure, the company stands to benefit through cloud services, enterprise tools, and advertising.
The Investment Outlook: A Long-Term Buy
While Meta’s remarkable 650% increase may have accounted for much of its short-term potential, the long-term narrative is just beginning to unfold. The company’s data advantage, strategic capital allocation, and undervalued status within the Magnificent Seven present a compelling case for sustained growth.
Investors should focus on the bigger picture, looking past short-term fluctuations. Meta has evolved beyond a mere social media platform; it is now a foundational player in the AI landscape of the coming decade. Its ability to leverage its data assets, invest in pioneering research, and maintain disciplined capital management positions it as a unique blend of defensive stability and offensive growth potential.
In an era where AI is set to transform industries, Meta is not just participating; it is actively shaping the future. For those with a decade-long investment horizon, this represents a powerful opportunity worth considering.
