3 Reasons to Buy Meta Platforms Stock Before 2027

Meta Platforms (NASDAQ: META), the parent company of Facebook, Instagram, and WhatsApp, has had a strong year of growth, while its stock has been quiet. As of Oct. 22, the stock was slightly down year to date and about 18% below its September high of $779.82.

That pullback is a buying opportunity, with Meta coming off a strong quarter and maintaining business momentum heading into 2027. Here are three reasons to take advantage of the dip.

1. Meta is putting personal AI agents in billions of hands

CEO Mark Zuckerberg's big goal is what he calls "personal superintelligence." Meta wants to give every person their own artificial intelligence (AI) agent -- software that carries out tasks on its own for you. The recent launch of Muse, Meta's new personal agent, shows how Meta can turn its massive AI investments into products that reach people directly, opening up new ways to diversify revenue beyond advertising.

It is perfectly positioned to be a major distributor of AI consumer products. Meta's family of apps is used by 3.6 billion people every day, a massive audience to monetize.

The early results are encouraging. More than 10 million people downloaded and set up Muse in the first six weeks. Shopping is its most common use right now, and management expects Muse to eventually earn more per user than Meta's existing apps because of how people are already using it.

2. AI is making Meta's ads more valuable to advertisers

Meta still makes most of its money selling ads, and AI is enhancing that growth engine. The company relies on ranking and recommendation models, where its AI systems decide which ad to show each person. In the third quarter, upgrades to its GEM and Andromeda models lifted conversions, meaning more people took action after seeing an ad.

Ad impressions grew 10% year over year, while the average price per ad climbed 14%. That pushed total revenue up 26% to nearly $65 billion, beating the top end of management's guidance.

Management expects fourth-quarter revenue of $73 billion to $76 billion. CFO Susan Li said that upcoming advances in models and product launches give Meta opportunities to maintain strong revenue growth throughout 2027.

3. The stock is trading at a market average P/E

Meta's reported operating profit fell 37% year over year in the third quarter, following a one-time $9.9 billion legal charge to resolve litigation over teen mental health and social media. Excluding the charge, operating income would have increased 11% to about $22.9 billion, for an adjusted operating margin of about 35%.

That high margin during a heavy AI spending cycle shows how well positioned Meta is to deliver long-term returns to shareholders.

Image source: Getty Images.

The stock offers solid value relative to growth expectations. At about $650, the stock trades at a forward price-to-earnings (P/E) multiple of 21.5 on 2026 estimates and 18.9 based on next year's.

Long term, analysts expect Meta's earnings to grow about 19% per year. If earnings grow at that pace, they would more than double by 2031. Assuming the stock continues to trade at the same earnings multiple, it could compound at roughly the same rate.

The stock is trading roughly in line with the S&P 500's forward P/E of 19.3. However, Meta may deserve a higher P/E, given its massive user base and its above-average earnings growth prospects.

The main item to watch is heavy AI spending, with $135 billion to $145 billion in capital expenditures planned for 2026, which has weighed on the share price this year. But Meta's strong quarter shows the benefits from its capital spending. The strong adoption of Muse and robust revenue growth make Meta stock a compelling buy heading into the new year.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.