2024 was a strong year for Meta — here’s what to watch for in 2025

Meta’s stock soared 70% in 2024, building on its strong performance from 2023, as the company balanced efficiency initiatives with strategic investments in AI and virtual reality.

Key performance metrics: Meta’s strategic decisions in 2024 resulted in significant financial improvements and shareholder value creation.

• The company’s operating margin increased by 156% at the end of 2023
• Meta introduced its first-ever dividend, signaling management’s confidence in sustainable profitability
• The stock currently trades at a forward P/E multiple of 24, above its five-year average of 21.2

Strategic transformation: Meta’s “year of efficiency” initiatives from 2023 continued to yield positive results throughout 2024.

• Management’s focus on reducing organizational layers and cutting costs drove enhanced profitability
• The company leveraged its vast user data to strengthen its position in generative AI
• New AI-powered advertising tools were introduced, enabling businesses to create their own ads more effectively

Growth drivers: Meta’s expansion strategy focuses on multiple revenue streams and technological innovation.

• The company is pursuing improved monetization of WhatsApp and Messenger platforms
• Threads, Meta’s competitor to X (formerly Twitter), represents a new growth opportunity
• The Ray-Ban smart glasses launch demonstrated Meta’s continued commitment to hardware innovation
• Development of the Llama large language model aims to strengthen business capabilities and create new revenue opportunities

Potential headwinds: Several external factors could impact Meta’s performance in 2025.

• Regulatory scrutiny remains a significant concern, particularly under the incoming Trump administration
• The Supreme Court’s decision on TikTok’s divestment law could significantly affect Meta’s Reels platform
• Ongoing investments in AI and Reality Labs initiatives must be balanced against profitability goals

Political landscape: The changing political environment presents both opportunities and challenges for Meta’s future.

• President-elect Trump’s previous criticism of Big Tech bias has led to increased engagement between tech CEOs and his team
• The potential U.S. ban of TikTok could benefit Meta’s competing short-form video offerings
• Regulatory uncertainty could affect Meta’s operations and market position

Looking beyond 2025: Meta’s ability to maintain its growth trajectory will depend on successfully navigating multiple challenges while capitalizing on emerging opportunities.

• The company’s commitment to efficiency must be balanced against necessary investments in AI and Reality Labs
• Success in monetizing newer platforms and increasing average revenue per user (ARPU) will be crucial
• Meta’s ability to adapt to changing regulatory and political landscapes will be critical for sustained growth