meta platform‘ (meta 2.48%) The stock is up about 180% over the past 12 months and currently trades just a few dollars short of its all-time high. Investors flocked to the social media giant as its advertising business recovered and management expanded its stock buyback authorization by $50 billion and began paying a dividend.
This rise pushed Meta’s market capitalization above $1 trillion for the first time in two years in January, and it is now worth $1.2 trillion. However, the value of the meta is still low. apple (AAPL -0.60%)which has curbed the company’s ad sales over the past three years by improving user privacy aspects of its iOS mobile operating system.
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But now that Meta’s business is back in full swing, can it overtake Apple, which currently has a market capitalization of $2.8 trillion, by 2030?
How much will Meta be worth by 2030?
Meta’s growth stalled in 2022 as it struggled with intense competition from the US. part time danceTikTok, major headwinds to the advertising market, and the impact of Apple’s user privacy upgrades. His Reality Labs division of the company, which houses Metaverse efforts and virtual reality and augmented reality devices, also continued to lose billions of dollars each quarter. During this difficult year, Meta’s revenue and earnings per share (EPS) declined 1% and 38%, respectively.
However, with the recovery of the advertising business, Meta’s revenue and EPS increased by 16% and 73%, respectively, in 2023. The company is countering Apple’s iOS changes by collecting more first-party data with its proprietary AI algorithms, competing with TikTok by expanding its short video platform Reels on Facebook and Instagram, and pushing back on more ads. Selling impressions offset the drop in advertising prices. It also attracted many new ad buys from Chinese e-commerce and gaming companies looking to reach more international customers. China-based advertisers drove his 5 percentage points of total revenue growth that year.
Analysts expect Meta’s revenue and profit to grow at an average annual rate of 14% and 22%, respectively, from 2023 to 2026. The company’s stock still looks reasonably valued compared to its forward P/E ratio of 24 times.
If Meta matches these projections and continues to grow earnings at an average annual rate of 15% from 2026 to 2030, EPS could rise to $46.70. If futures multiples remain roughly the same, the company’s stock could trade at about $1,120 in early 2030, giving it a market cap of about $2.8 trillion. This would be in line with Apple’s current valuation.
How much will Apple be worth by 2030?
Apple has also suffered poor performance over the past three years. In fiscal 2022 (ending September 24, 2022), sales and EPS increased by only 8% and 9%, respectively, due to the end of the strong sales period for the iPhone 12, the company’s first 5G device. As the 5G upgrade cycle ended and Mac sales slumped in the post-pandemic market, Apple’s sales fell 3% and profits were nearly flat. A slowing Chinese economy and severe currency headwinds further exacerbated the pressure.
Analysts expect Apple’s sales and profits to grow at an average annual rate of 4% and 8%, respectively, from fiscal 2023 to fiscal 2026. While these growth rates seem stable, they’re not great for a stock trading at 28x forward P/E.
Apple remains highly regarded for its growth rate, as it is widely considered a safe-haven asset. The company could diversify its non-iPhone portfolio over the next few years with new products and subscription services, and could leverage its $173 billion in cash and marketable securities to expand through acquisitions and investments. There is sex. But unless growth picks up again, the price-to-earnings ratio could gradually shrink.
If Apple meets analysts’ expectations and grows EPS at a modest 8% annually from fiscal 2026 to fiscal 2030, its EPS could reach $10.50. If the company’s valuation remains at 28 times forward earnings at that point, its stock would be trading at $294, giving it a market cap of $4.5 trillion. But if Apple’s forward multiple drops to 20x, like other mature tech companies, its stock price would be $210 per share, giving it a market cap of $3.2 trillion.
Meta may have more upside than Apple
Based on these calculations and projections, Meta’s value probably won’t surpass Apple’s by 2030, but it could have much more upside than the iPhone maker. For Meta to reach Apple’s current market capitalization by 2030, the stock would need to rise more than twice its current level.
On the other hand, if Apple continues to deliver single-digit profit growth while trading at a premium valuation, those profits could be difficult to match. That outlook may change as the Vision Pro becomes more widespread and Apple launches other innovative products and services, but it will take a lot of effort to diversify the business away from dependence on the iPhone. right.
Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. Leo Sun has positions on his Apple and meta-his platforms. The Motley Fool is affiliated with and recommends Apple and Meta Platforms. The Motley Fool has a disclosure policy.
