Meta Platforms (NASDAQ: META) stock has been on fire recently. Indeed, since the last time I wrote about the social media giant in early 2024, its market cap has soared to $1.28trn.

Unfortunately, I’ve never owned Meta (formerly Facebook) shares. They’re up 1,218% since going public in May 2012. So would I consider buying some today?

Big gains

At the start of 2024, the Meta share price was $353. Today it’s $504. That translates into a monster return of 42.7% and demolishes the S&P 500‘s 14.7% (excluding dividends).

It means a £10k investment made at the start of the year would now be worth £14,270 on paper.

There would have been a small dividend too, enough to get some bread and milk, as the firm declared in February that it would start paying quarterly dividends.

The starting yield may be small today at 0.4%, but Meta strikes me as the sort of company that could grow its payouts substantially far into the future.

According to The Guardian, founder and CEO Mark Zuckerberg stands to take home $700m (£549m) in the first year thanks to his 350m Meta shares. That’s certainly not bread-and-milk money!

Growth continues

In Q1 to 31 March, Meta’s revenue climbed 27% year on year to $36.4bn. Ad impressions were up 20% and the average price per ad rose 6%. It generated a massive $12.5bn in free cash flow, up from $6.9bn the year before.

Facebook, Instagram, and WhatsApp aren’t declining in popularity by any stretch. In fact, their daily active users increased 7% to hit a whopping 3.24bn. That’s approaching half the global population!

One issue was that capital expenditure for 2024 is anticipated to be $35bn-$40bn, higher than the original estimate of $30bn-$37bn. The reason is increasing investments in artificial intelligence (AI).

After this report, the stock dropped 16%. However, it has since clawed back those losses and added another 2% on top.

Chinese e-commerce spend

In 2023, online marketplace Temu was reportedly Meta’s top advertising spender. The firm splashed $2bn on digital ads across Facebook and Instagram to reach shoppers in the West and elsewhere. Shein was also a significant buyer of advertising.

The problem here is that if China-based advertisers pull back on spending, that could impact Meta’s earnings growth. This is worth bearing in mind, I’d say.

Having said that, the maturing Chinese e-commerce market should encourage more marketers there to expand abroad to reach new customers. Meta still attracts approximately 82% of all social media ad spending, so is in the sweet spot in this regard.

Worth me buying?

Analysts forecast that the company will grow its earnings by around 19% over the next few years. And that’s despite its cash-incinerating metaverse segment (Reality Labs) dragging on profits!

As for valuation, we’re looking at a forward price-to-earnings (P/E) multiple of 24.5. That compares favourably with other Magnificent Seven stocks like Nvidia (48.1), Microsoft (37.1), Amazon (39.3) and Tesla (64).

Looking ahead, Meta appears incredibly well-positioned in AI. The amount of data it possesses is mind-boggling, giving it a huge advantage when training and deploying AI tools. These can help advertisers optimise their marketing spend, for example.

If I had spare cash to invest in June, I’d happily add Meta stock to my portfolio.