Meta Platforms (META) stock has made a notable recovery, bouncing back from its recent dip and gaining more than 16% in just the past month. This recovery comes as optimism returns to the broader market, driven in part by easing tensions in the U.S.-China trade relationship. Moreover, with new European tariffs postponed and negotiations ongoing, investor confidence has improved, pushing the equity market higher.

The improving macroeconomic outlook is an encouraging sign for companies that rely on advertising revenue. As fears of a looming recession fade, advertisers are likely to increase spending, giving a boost to the top line of companies like Meta.

Building on this momentum, Meta’s latest earnings report indicates that its fundamentals remain solid. Meta’s key performance indicators remain healthy, reflected through continued user engagement and effective monetization strategies. For instance, over 3.4 billion people are using at least one of its apps each day. Further, its focus on improving advertising is leading to better conversions and higher ad pricing. These positive results suggest the company is well-positioned to benefit from both improved market sentiment and internal operational strength.

Looking ahead, the highest price target on Wall Street for META stock is $935, reflecting over 49% upside from current price levels. As Meta drives user engagement and better monetizes its platforms, it appears well-positioned to keep climbing and reach that ambitious price target.

Meta Stock’s Growth Drivers

Meta’s two key growth catalysts are showing signs of strength. The first growth lever is its ability to improve user engagement on its platforms, and the company is witnessing higher engagement. During its Q1 earnings call, management announced that its Family Daily Active People (DAP), a metric encompassing users across its platforms, reached 3.43 billion in March 2025, representing a 6% increase from the prior year.

Meta’s Family of Apps saw robust user engagement in the first quarter, with video consumption up double digits year-over-year, particularly on Facebook and Instagram in the U.S. This growth is primarily attributed to continuous improvements in Meta’s content recommendation systems using AI.

Meta’s focus on leveraging large language models (LLMs) to enhance these systems is working in its favor. LLMs are helping Meta better understand what users find interesting, leading to improved recommendations. This is leading to an increase in the time spent on its platforms.

These AI enhancements are also being integrated into Meta AI, the company’s digital assistant, which is available across its platforms and a new standalone app in the U.S. and Canada. Personalization improvements are driving user engagement, supporting its growth.

Meta’s AI devices will also drive future user growth. The Ray-Ban Meta AI smart glasses have seen a 4 times increase in monthly active users over the past year. Voice command usage is climbing rapidly, and new features like real-time translations in multiple languages are enhancing their appeal globally.

These innovations strengthen Meta’s position in wearable tech, creating new revenue streams beyond digital ads.

Meta’s second significant growth driver is its ability to make more money from its user base. On this front, Meta is optimizing ad placement across its platforms. Furthermore, it introduced ads on new surfaces, such as Threads. Although Threads isn’t expected to deliver significant ad revenue this year, the gradual rollout lays the groundwork for future monetization.

Meta is also doubling down on AI-driven ad tech. The new Generative Ads Recommendation model utilizes AI to predict which ads will resonate with users more accurately. Early tests on Facebook Reels showed improved conversions. Meanwhile, the Advantage+ suite, Meta’s AI-powered ad tools, is gaining adoption and helping advertisers reach their audience more effectively.

The Bottom Line for Meta Stock

Meta Platforms appears well-positioned for substantial growth, driven by rising user engagement and AI-driven initiatives. As macroeconomic conditions improve and digital ad spending accelerates, Meta stands to benefit significantly from its dominant position in the social media space. Moreover, its expanding footprint in wearable tech is a positive. Its continued investment in AI, both for content personalization and advertising efficiency, is already showing tangible results and will push its stock price higher.

Wall Street analysts are bullish about Meta stock and have a “Strong Buy” consensus rating.