Meta Platforms (META) is making significant shifts in its strategic focus, moving away from metaverse investments towards enhancing its AI infrastructure and smart glasses development. The appointment of Dina Powell McCormick to a senior leadership position dedicated to artificial intelligence underscores this new direction. Recently, Meta's stock has faced challenges, reporting a 15.41% return over the last three months and a modest 4.64% year-to-date increase.
Despite a one-year total shareholder return of 1.54% and a remarkable three-year return nearing 7x, investor sentiment appears cautious as they reevaluate the potential impacts of increased capital expenditures and the risks associated with the company's AI initiatives and smart glasses. Although Meta's shares have seen declines this past quarter, their long-term performance remains strong, with a more than threefold return over several years.
Looking ahead, Meta's upcoming Q3 2024 results will likely demonstrate its ability to balance growth and efficiency while managing costs effectively. The company is also expected to continue its substantial investments in AI and the metaverse, which could secure its leadership in digital innovation. Analysts suggest that the fair value of Meta exceeds its recent closing price of US$620.25, indicating potential undervaluation, with a projected fair value of $723.11.