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Meta shares are up 54% in recent months, the best performance in the S&P 500 index.
In November last year, Meta's share price reached its lowest point. Since then, the value of the American company's securities has risen by 54%, which is the best result for the specified period among all stocks included in the S&P 500 index. However, some investors remain skeptical, mainly because the owner of the social networks Facebook and Instagram continues to to invest a significant part of the funds in the development of the metaverse.
Even after a sharp rise in the value of Meta shares, they continue to sell below their average price-to-earnings ratio over the past decade and are among the cheapest in the Nasdaq 100 index. Meta securities are still trading 64% under 2021. Analysts estimate the average growth of Meta shares in the next 12 months at the level of 7.7%.
Skeptics fear that Meta's bet on creating a metaverse, which requires huge investments, will continue to be a priority for the foreseeable future. It is expected that this year one fifth of the company's total costs will be associated with the implementation of this project. In addition, Meta's once lucrative advertising business is having a hard time, partly because of Apple's privacy rules, which make it difficult to serve targeted ads.
Some investors are still hopeful that Metaverse CEO Mark Zuckerberg will cut costs or abandon metaverse ambitions altogether. The reason for this decision is expected to be the impending economic downturn, which will lead to a reduction in sales of technology companies. In addition, investors are awaiting Meta's fourth quarter financial report, which will be published on February 1.