Meta Platforms (META) stock has been on an impressive upward trend, rising 76% over the past year. This reflects the company’s ability to grow its daily active user base and driver higher engagement on its leading social media platforms. Further, its investments in artificial intelligence (AI) and increasing efficiency have supported its rising stock price.

Q4 2024 Performance Highlights

In its latest financial report for the fourth quarter of 2024, Meta exceeded expectations. The company reported an average of 3.35 billion Family daily active people (DAP) in December 2024, marking a 5% increase from the previous year. This growth was accompanied by a 6% increase in ad impressions delivered across its Family of Apps in the fourth quarter alone and an impressive 11% increase for the full year of 2024.

What stands out is Meta’s enhanced monetization efficiency and robust advertiser demand, which contributed to a significant rise in the average price per ad. In Q4 2024, the average price per ad increased by 14% year-over-year, continuing a positive trend that saw a 10% increase for the entire year.

Looking ahead, its business momentum will likely sustain. The company’s revenue performance is driven by two key factors, including its ability to drive user engagement and its effectiveness in monetizing that engagement over time. With both metrics showing positive trends, the outlook for 2025 remains optimistic.

Meta to Drive User Engagement

Meta’s flagship platforms — Facebook, Instagram, and WhatsApp — are experiencing sustained growth in daily active users globally and in the U.S. Moreover, video content, in particular, has been a significant driver of this engagement. In the fourth quarter, video consumption on Instagram grew by a double-digit rate year-over-year, with similar growth observed on Facebook in the U.S.

Meta sees video as a key area for growth. The company is optimizing its ranking systems to enhance user experience and increase video viewership. These efforts are expected to further bolster engagement levels in 2025.

Meta has also prioritized original posts in Instagram recommendations. Additionally, the company is committed to providing a comprehensive suite of creative tools to streamline content creation on mobile devices. This initiative aims to enhance content generation on its platforms and drive higher user engagement.

Meta’s success with Threads in 2024 has laid the groundwork for continued growth in 2025. The company is fine-tuning its recommendation systems to prioritize recent posts, spotlight content from top creators, and ensure users see updates from followed accounts. Efforts to improve personalized feeds aim to better cater to individual interests.

AI remains a significant growth area, with over 700 million monthly active users on Meta AI. The company is rolling out updates to enhance personalized responses, leveraging user interactions on Facebook and Instagram to better understand preferences and interests.

Meta’s ongoing investments in video content, creative tools, social connectivity, and AI integration are expected to drive higher engagement across its platforms. This strategic focus strengthens user experiences and supports the company's revenue growth.

Monetization and Revenue Growth

Meta is strategically advancing its monetization efforts by expanding ad opportunities on lower-revenue surfaces, particularly video content. By fine-tuning its ad delivery systems, Meta aims to place ads at the right time and place, ensuring maximum relevance for users and value for advertisers. This optimization is a key pillar of its growth strategy.

In the long term, Meta envisions significant potential in unmonetized platforms like Threads. While the company has begun testing ads on Threads, it anticipates a gradual rollout and does not expect this initiative to meaningfully impact revenue or impression growth in 2025. Nevertheless, this move indicates that Meta is laying a solid foundation for future monetization.

Meta is enhancing its ad-ranking systems through advanced machine learning. These improvements aim to elevate the quality and personalization of advertisements, making them more effective for both users and advertisers. By offering advertisers greater automation for their campaigns, Meta is solidifying its position in the digital advertising landscape.

Overall, the company’s efforts to drive engagement and improve monetization position it well for significant growth over time.

Capex Supporting Future Growth

Meta expects its 2025 capital expenditures to range between $60 billion and $65 billion. The growth in capital expenditures will likely be driven by increased investments to support its generative AI efforts and core business. Moreover, a significant portion of the 2025 capex will be allocated to its core business, enabling Meta to achieve double-digit revenue growth in the coming years.

What Wall Street Says on Meta Stock 

Wall Street analysts remain optimistic about Meta’s trajectory, maintaining a “Strong Buy” consensus rating. This sentiment reflects confidence in the company’s ability to sustain its upward momentum, driven by its user engagement initiatives, AI advancements, and advertising efficiency.