Facebook’s parent company, Meta Platforms META has achieved an unprecedented milestone. The stock soared to an all-time high after having risen for 20 consecutive trading days. META is up 25.8% since the start of the year and a staggering 600% from its 2022 lows. With this gain, the social media giant is the biggest winner among the “Magnificent Seven” group this year (read: Is Meta Now the Lone Star in the Big Tech Cohort? ETFs in Focus).
Given bullish sentiments, investors seeking to tap the growth should invest in ETFs with a large allocation to this social media giant. These include iShares Global Comm Services ETF IXP, Fidelity MSCI Communication Services Index ETF FCOM, Vanguard Communication Services ETF VOX, Communication Services Select Sector SPDR Fund XLC and First Trust Dow Jones Internet Index Fund FDN.
We have highlighted several factors for META’s outperformance that are likely to continue this year:
Investments in Artificial Intelligence: The social media giant will be spending $60-$65 billion in AI infrastructure investments for 2025. CEO Mark Zuckerberg said 2025 will “be the year when a highly intelligent and personalized AI assistant reaches more than 1 billion people, and expects Meta AI to be that leading AI assistant.”
The company is also making a push into AI-powered humanoid robots. Per Bloomberg, Meta is forming a new team within its Reality Labs hardware division to conduct the work.
Expansion into AI Hardware: Meta is reportedly in discussions to acquire South Korean chip startup FuriosaAI to bolster its AI hardware infrastructure. The move will reduce its reliance on dominant chipmaker NVIDIA (NVDA) and expand the use of its in-house MTIA chips.
Advertising Dominance: Meta’s core advertising business continues to thrive, providing a solid foundation for its AI and virtual reality ventures. Currently, Meta holds the second place globally in digital advertising revenues, just behind Alphabet GOOGL (read: META Beats on Q4 Earnings, Plans Big Spending: ETFs in Focus).
Bullish Analysts: Wall Street analysts have been largely optimistic about Meta. The stock currently has a Wall Street analyst recommendation of 1.37 on a scale of 1 to 5 (Strong Buy to Strong Sell), made by 53 brokerage firms. Of these, 45 are Strong Buy and two are Buy. Strong Buy and Buy, respectively, account for 83.33% and 3.7% of all recommendations. Based on short-term price targets offered by 53 analysts, the average price target for Meta Platforms comes to $738.08, ranging from a low of $505.00 to a high of $900.00.
Cheap Valuation: At current levels, META trades at 27.63X forward earnings, a discount to the Zacks Internet-Software industry average of 29.86X. As such, it remains one of the cheapest big tech plays.
iShares Global Comm Services ETF (IXP)
iShares Global Comm Services ETF provides global exposure to companies in media, entertainment, social media, search engine, video/gaming and telecommunication services by tracking the S&P Global 1200 Communication Services 4.5/22.5/45 Capped Index. It holds 66 stocks in its basket, with Meta Platforms taking the top spot at 24.9% share. iShares Global Comm Services ETF has amassed $439.3 million in its asset base while trading at an average daily volume of 17,000 shares. The expense ratio is 0.41%. IXP has a Zacks ETF Rank #3 with a Medium risk outlook (see: all the Communication ETFs here).
Fidelity MSCI Communication Services Index ETF (FCOM)
Fidelity MSCI Communication Services Index ETF follows the MSCI USA IMI Communication Services 25/50 Index. It holds 109 stocks in its basket, with Meta Platforms occupying the top position at 24.7%. Fidelity MSCI Communication Services Index ETF has amassed $1.5 billion in its asset base and trades in an average daily volume of 164,000 shares. It charges 8 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk.
Vanguard Communication Services ETF (VOX)
Vanguard Communication Services ETF also targets the communication sector by tracking the MSCI US Investable Market Communication Services 25/50 Index. Holding 117 stocks in its basket, Meta Platform takes the top spot with a 22.6% share. Vanguard Communication Services ETF has AUM of $4.9 billion and trades in a good volume of 184,000 shares a day, on average. It charges 9 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
Communication Services Select Sector SPDR Fund (XLC)
Communication Services Select Sector SPDR Fund offers exposure to companies from telecommunication services, media, entertainment and interactive media & services and has accumulated $22.4 billion in its asset base. It follows the Communication Services Select Sector Index and holds 22 stocks in its basket, with Meta Platforms occupying the top position at 21.4% share. Communication Services Select Sector SPDR Fund charges 8 bps in annual fees and trades in an average daily volume of 4.5 million shares. It has a Zacks ETF Rank #1 (read: How Will Big Tech ETFs Be Impacted by Trump Tariffs?).
First Trust Dow Jones Internet Index Fund (FDN)
First Trust Dow Jones Internet Index Fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 40 stocks in its basket, with Meta Platform occupying the top spot at 11.3%. First Trust Dow Jones Internet Index Fund is the most popular and liquid ETF in the broad technology space, with AUM of $7.4 billion and an average daily volume of around 398,000 shares. FDN charges 51 bps in fees per year and has a Zacks ETF Rank #1 with a High risk outlook.
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