Why Meta Platforms Might Be a Good Buy Right Now
Key Points
Meta Platforms' advertising business accounts for more than 97% of its total revenue.
The stock has stumbled this year due to regulatory issues and AI spending.
But the overall business is strong -- and more reasonably priced than some peers.
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Meta Platforms (NASDAQ: META) is dealing with a lot of pressure right now. The social media giant's stock is down more than 13% as of June 10, largely due to mounting regulatory issues and investors' growing skepticism about spending on artificial intelligence (AI). But long-term investors willing to look past recent turbulence may find that Meta is a worthy buy right now, given its low price.
This isn't meant to discount the very real challenges Meta faces at the moment. Particularly in Europe, regulators are enforcing the Digital Markets Act, which threatens Meta's margins with fines and changes to data policies.
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On the spending side, Meta founder and CEO Mark Zuckerberg is committed to his AI infrastructure plan. Capital expenditures are substantial and perhaps hard to justify. After the failure of his Metaverse initiatives, investors and analysts are a bit more skeptical for good reason.
Image source: The Motley Fool.
On the bright side, Meta's business is still incredibly strong. Its advertising platform, spanning Instagram, Facebook, and WhatsApp, reaches nearly half the global population. That level of scale is not easily replicated or replaced. In the first quarter of 2026, advertising revenue exceeded $55 billion, with total Meta revenue reaching $56.3 billion.
If Meta is successful with its AI ambitions, it could further boost the ad business in addition to wider adoption of its Llama models in other industries.
Meta's stock is better priced than some of its peers. Even with a market cap topping $1 trillion, Meta's forward P/E ratio is just 18, and its PEG ratio is 0.82, which suggests the stock may be undervalued right now. Its price-to-sales, price-to-book, and enterprise value-to-revenue ratios are all in the single digits.
No doubt, the company faces significant short- and intermediate-term headwinds, but if its AI strategy pays off and the advertising business continues to flourish, buying now while the stock is down is a solid move.
Should you buy stock in Meta Platforms right now?
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Catie Hogan 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.
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