Meta Platforms Inc. (META), formerly known as Facebook Inc., is a developer and producer of software and related products that enable people to connect digitally with friends and family through the internet. Meta owns and runs popular social media sites such as Facebook, Instagram, Messenger, Threads, and WhatsApp, while also producing virtual reality and augmented reality products, such as its VR headset Oculus. Users can access its Family of Apps through mobile devices, computers and laptops, virtual reality headsets, and wearable devices.

Established in 2004, the company is headquartered in Menlo Park, California. With a massive market cap of $1.23 trillion, “Magnificent Seven” member META has rallied 66% over the past year, easily outpacing the broader Nasdaq-100 Index ($IUXX). In 2024 alone, the Big Tech stock is 38% higher.

However, amid the recent rotation out of Big Tech leaders and into small-cap stocks, META has corrected almost exactly 10% from its July 1 highs. For investors who have been waiting to buy some of the stock market's biggest names on a dip, is this the right opportunity?

Meta's Q1: Weaker Guidance, Higher AI Spending

As the company prepares to report its Q2 earnings results July 31, let's take a quick look back at Meta's most recent earnings report. 

Back in April, the company reported revenue of $36.46 billion against analysts' estimate of $36.22 billion, which translated into a 27.3% decline YoY. Earnings for the quarter arrived at $4.71 per share, which was better than Wall Street’s $4.32 per share forecast. 

Despite the Q1 beat, META shares sank more than 10% on April 26 as investors reacted to its weak guidance. Management said it expected Q2 revenue of $37.75 billion at the midpoint, which was lower than the prevailing consensus of $38.32 billion. 

Additionally, META announced aggressive investments in artificial intelligence (AI) and other product initiatives, in the range of $35 billion to $40 billion - marking a sharp pivot from its cost-cutting “year of efficiency.”

Ahead of its Q2 announcement, Wall Street is looking for META to report adjusted EPS of $4.77 on revenue of $38.28 billion.

Billionaires Still Back Meta

When it comes to big money, billionaire hedge fund manager Phillipe Laffont, founder and portfolio manager of Coatue Management, is a big backer of Meta. Laffont's portfolio reflects his affinity for tech, and his holdings of Meta top the list at 4 million shares worth more than $2 billion. That represents over 8% of the billionaire's portfolio.

Elsewhere, billionaire investor Ken Fisher has more than 5.64 million Meta shares worth around $2.82 billion. 

Is Meta Stock a Buy?

Analysts rate Meta stock a consensus “Strong Buy,” with a total of 45 analysts in coverage. Among them, 39 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, 3 have a “Hold” rating, and the remaining 2 have a “Strong Sell” rating.  

Meta's mean price target is $535.34, which signifies expected upside of 9.5% from here. 

With a newly minted annual dividend yield of 0.4%, and a reasonable PEG ratio of 1.34, META looks like a solid Mag 7 member stock to buy on the dip.