As Meta Launches Threads Ads Globally, Is It Time to Buy, Sell, or Hold META Shares?

Meta Expands Threads with Global Advertising Launch

Meta Platforms, the company behind Facebook, Instagram, WhatsApp, and Threads, has long dominated the digital landscape through its advertising-driven business model. Now, Threads—once a secondary feature within Meta’s ecosystem—is taking center stage as Meta introduces ads to the platform worldwide, officially beginning its monetization journey. This move signals more than just a routine update; it marks Threads’ evolution into a rapidly growing microblogging service with increasing financial significance for Meta.

With over 400 million active users each month and daily activity levels now comparable to Elon Musk’s X, Threads is quickly transitioning from an experimental platform to a significant revenue source. Meta is deploying its proven advertising solutions—such as carousel ads, visually engaging formats, Advantage+ automation, and streamlined campaign management—while also implementing brand safety measures to reassure advertisers.

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For investors, Meta has always been both exciting and unpredictable. After a strong performance leading into the third quarter of 2025, the stock retreated as market attention shifted to Meta’s ambitious spending plans. Concerns over rising capital expenditures, ongoing interest rate uncertainty, and high valuations in artificial intelligence have kept investor sentiment cautious. With Threads emerging as a possible growth driver, the question remains: should investors maintain their positions in META, reduce their holdings, or consider increasing their exposure?

Meta Stock Overview

Meta Platforms, originally launched as Facebook in 2004, has grown from a college project into a global digital powerhouse encompassing Instagram, WhatsApp, Messenger, and now Threads. What started as a simple social feed has evolved into a platform that shapes communication, creativity, and connection for billions. Today, Meta is heavily investing in artificial intelligence, augmented reality, and its vision for the metaverse, aiming to become the backbone of future digital interaction.

This forward-thinking approach is evident in Meta’s stock performance. Over the past ten years, the company’s shares have surged nearly 487%, bringing its market value to approximately $1.66 trillion and securing its place among the “Magnificent Seven.” However, recent trading activity shows that even industry leaders experience periods of consolidation.

META’s Recent Performance and Market Sentiment

As the new year unfolds, META’s stock has faced challenges. With January drawing to a close, shares are up just 0.32% year-to-date, reflecting a downward trend that has persisted for several months. The decline accelerated after Meta’s third-quarter 2025 earnings report on October 30, when the stock dropped 11.3% in a single day. Over the past quarter, META has fallen about 9.78%, leaving it roughly 20.4% below its 52-week peak of $796.25.

The primary drivers behind this decline are familiar: investor concerns about the sustainability of ad revenue, escalating AI-related expenditures, and the absence of a standalone profit generator to offset these costs. While Wall Street remains supportive of AI initiatives that enhance ad technology, enthusiasm wanes for consumer-facing AI products with uncertain returns.

Technical indicators present a mixed picture. The 14-day Relative Strength Index (RSI) stands at 56.28, suggesting a neutral to slightly bullish outlook. However, the MACD oscillator remains negative, with the MACD line below the signal line and a persistently red histogram, indicating ongoing selling pressure as the stock seeks a short-term bottom.

From a valuation perspective, META appears pricey at first glance, trading at 21.43 times forward earnings and 8.32 times forward sales—both well above industry averages and its historical norms. Yet, this premium reflects Meta’s scale and ambition. The company is expanding beyond advertising into AI, robotics, and the metaverse. As advancements in AI drive faster growth in revenue and profits, these valuation multiples could gradually decrease.

Investor Reactions Following Meta’s Q3 Results

Meta’s third-quarter earnings, released on October 29, delivered results that would typically boost a stock. Revenue climbed 26% year-over-year to $51.2 billion, surpassing expectations thanks to a robust advertising business. AI-powered targeting, increased engagement with Reels, strong ad demand, and higher user activity all contributed. Meta reported that AI recommendations alone increased time spent by 5% on Facebook and 10% on Threads—substantial gains at scale.

Adjusted for a deferred tax charge, earnings per share would have risen to $7.25 from $6.20, significantly better than the reported diluted EPS of $1.05.

During the quarter, ad impressions grew by 14%, and average ad prices rose 10% year-over-year, highlighting improved ad performance and strong demand from advertisers. The number of daily active users across Meta’s family of apps increased by 8% annually, demonstrating the company’s deep integration into daily digital life.

Despite these strong results, the stock declined—not due to third-quarter performance, but because of concerns about the future. Meta projected solid fourth-quarter growth, with revenue expected between $56 billion and $59 billion. However, the real worry centered on spending. Management outlined a significant increase in capital expenditures for 2025, forecasting $70–$72 billion—almost double the 2024 figure—with even higher spending anticipated for 2026.

This spending surge was already evident in the quarter’s results. Free cash flow dropped to $10.6 billion, costs jumped 32% year-over-year, and research and development accounted for nearly 30% of revenue. Cash and marketable securities fell to $44.45 billion, while long-term debt remained steady at $28.83 billion. Nevertheless, CEO Mark Zuckerberg remained confident, describing the increased investment as essential for building Meta’s AI future.

Meta is scheduled to announce its fourth-quarter and full-year 2025 financial results after the market closes on Wednesday, January 28. Analysts expect fourth-quarter revenue to reach approximately $58.38 billion, with earnings per share projected to rise 3.2% year-over-year to $8.28. For fiscal 2025, EPS is forecasted to grow 21.29% to $28.94, with a further 4.42% increase to $30.22 the following year.

Analyst Outlook for Meta

Wall Street remains highly optimistic about META, with a consensus rating of “Strong Buy” reflecting broad confidence in the company’s growth trajectory. Out of 56 analysts, 45 recommend a “Strong Buy,” three suggest a “Moderate Buy,” and eight advise holding the stock.

The average analyst price target for META stands at $834.92, indicating a potential upside of 26.74%. Rosenblatt’s highest target of $1,117 suggests the stock could climb as much as 69.56% from current levels.

Conclusion: The Road Ahead for META

The introduction of ads on Threads represents a pivotal moment for Meta. While the platform is losing its ad-free appeal, it is gaining a clear path toward becoming a substantial business. For Meta, this move reinforces its already powerful advertising network and strengthens its competitive position, even as short-term challenges from heavy AI investments persist.

For investors, the situation is nuanced. Short-term pressures from rising costs and uncertain sentiment are real, but Meta’s long-term prospects—driven by its scale, data, and control over its AI infrastructure—remain strong. For those who believe in Meta’s ability to turn long-term investments into future profits, the current pullback may present an opportunity to hold or even increase their stake, rather than exit the position.