Meta’s stock stumbled over the past year.
Investors are concerned about its high spending on AI infrastructure.
But its stock still looks cheap relative to its long-term growth potential.
As the S&P 500 hovers near its all-time high, it might seem like a precarious time to invest in high-growth stocks. However, there’s one growth stock which I think is still worth buying in this frothy market: Meta Platforms (NASDAQ: META). Let’s see how this Magnificent Seven stock could easily turn a modest $1,000 investment into a lot more money.
Meta, which owns Facebook, Instagram, WhatsApp, and Messenger, is the world’s largest social media company. It served 3.58 billion daily active users (DAP) across its entire family of apps at the end of 2025, representing 7% year-over-year growth.
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Image source: Getty Images.
That massive audience, equivalent to over 40% of the world’s population, makes Meta an essential platform for purchasing digital ads. It also continues to leverage the data accumulated from its active users to craft targeted ads. That’s why its total ad impressions and average price per ad increased 12% and 9%, respectively, in 2025, as its total revenue rose 22%.
But in 2025, Meta’s operating margin dipped by a percentage point to 41%, as the rising costs of its AI infrastructure and its unprofitable Reality Labs segment offset the robust growth of its higher-margin advertising business. That pressure, along with a massive one-time U.S. tax charge of about $15.9 billion in the third quarter, reduced its EPS by 2% for the whole year.
Those near-term concerns about its elevated spending weighed down its stock over the past year. But over the long term, its AI investments should pay off by strengthening its data mining and ad targeting algorithms. Its Reality Labs investments could also bear fruit as the nascent virtual reality and augmented reality markets expand.
From 2025 to 2028, analysts expect Meta’s revenue and EPS to both grow at CAGRs of 20%. Those are stellar growth rates for a stock that trades at just 21 times this year’s earnings. If it matches those estimates and trades at a more generous 25 times forward earnings by the beginning of 2028, its stock could rise more than 60% to over $1,000 within the next two years.
Over the past few years, Meta’s growth was throttled by Apple‘s (NASDAQ: AAPL) privacy changes on iOS, competition from ByteDance’s TikTok, and macro headwinds for the advertising market. Yet it overcame Apple’s changes by collecting more first-party data and upgrading its AI algorithms, and it expanded Reels to keep pace with TikTok.
Therefore, I believe Meta will easily overcome its recent challenges and continue dominating the social networking and targeted advertising markets. Its recent pullback represents a great buying opportunity for long-term investors who can tune out the near-term noise.
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Leo Sun has positions in Apple and Meta Platforms. The Motley Fool has positions in and recommends Apple and Meta Platforms. The Motley Fool has a disclosure policy.
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