Meta Platforms (META) has once again found itself in the spotlight as its share price recently saw some movement that may catch investors’ attention. While there is no single headline-grabbing event driving this fluctuation, the fact that META shares have shifted could leave many wondering whether it is a subtle shift in sentiment, a sign of underlying growth, or simply the market searching for direction. Taking a step back, Meta’s stock has delivered substantial gains so far this year, building on its long-term track record. Over the past year, shares have climbed 38%, and recent momentum remains positive with a nearly 9% gain over the past three months. These gains come alongside the company’s ongoing push into AI products, short-form video, and continued expansion of its advertising business. This all raises an essential question for investors: after this climb, is Meta Platforms still trading at an attractive valuation, or is the market already pricing in the company’s next leg of growth?

According to the most widely followed narrative, Meta Platforms is currently trading well above its estimated fair value, making the stock appear overvalued based on the latest analysis and underlying projections.

“Meta plans to invest between 60 and 65 billion in AI infrastructure in 2025, almost double its spending in 2024. This investment includes the deployment of over 1.3 million GPUs and a focus on custom silicon such as MTIA to optimize compute efficiency. The company’s commitment to AI infrastructure aims to maintain its competitive edge in the rapidly evolving AI landscape.”

Will Meta’s massive AI spending pay off? There is a pivotal set of growth bets, platform breakthroughs, and bold profit expectations factored into this narrative. Want to see what is driving such an aggressive valuation call? The deep dive reveals the surprising assumptions powering this figure.

Result: Fair Value of $538.09 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, regulatory hurdles or slower than expected adoption of new AR/VR technologies could quickly shift market sentiment and challenge Meta’s optimistic growth outlook.

Find out about the key risks to this Meta Platforms narrative.

While the popular narrative suggests Meta is overvalued, our SWS DCF model paints a very different picture. The model indicates Meta may actually be undervalued at current prices. Could the market be missing something key here?