Meta Platforms Shows Strength Amid Overbought Signals and Legal Risks; Target Price Up to $766

Technical Analysis

Meta Platforms, Inc. (META) closed at $647.49 on May 30, 2025, up 0.38% from the prior session. The stock traded within a daily range of $632.78 to $649.41, showing intraday strength near its resistance level at $656.03. The 14-day RSI stands at 73, indicating short-term overbought conditions, which may cause minor pullbacks or consolidation in the immediate term. Price remains comfortably above both the 50-day ($582.71) and 200-day ($593.65) moving averages, confirming an established uptrend. The MACD over three months at 43.65 suggests strong bullish momentum. ATR of 2.88 reflects moderate volatility, suggesting relatively stable price movement. A stop-loss near $622.47 would limit downside risk if momentum falters.

For June 2, 2025, the technical picture favors modest continuation, although near-term profit taking cannot be ruled out given the elevated RSI. Support at $586 and the stop near $622 provide solid downside buffers. Over the next week, momentum indicators imply further gains toward resistance or the consensus price target range in the $750-$766 area.

Fundamental Analysis

META’s market capitalization stands at $1.63 trillion, reflecting its dominant position in the technology and AI sectors. The trailing twelve-month EPS of $25.58 combined with a PE ratio of 25.31 suggests the stock is trading in line with growth expectations common for large-cap tech companies with expanding AI-driven revenue streams. The discounted cash flow valuation at approximately $599.90 per share indicates current prices are about 8% above intrinsic value estimates, reflecting a premium justified by growth potential and efficient capital allocation.

Meta continues to leverage AI across advertising, engagement, messaging, and device platforms, unlocking multiple new revenue growth avenues. This diversification bodes well for sustained revenue generation and margin expansion notwithstanding ongoing investments in Reality Labs and regulatory risks. The upcoming quarterly earnings announcement on July 30, 2025, will be pivotal for re-affirming guidance and investor confidence.

However, the investigations announced on June 1 around potential claims can introduce uncertainty and volatility. Such legal developments may pressure shares in the short term, though their impact remains to be fully assessed.

Valuation currently offers moderate upside from fundamentals, supported by a consensus analyst target median of $750 and a strong buy/buy analyst consensus (62 out of 73 analysts positive). The presence of marquee investors increasing AI exposure further highlights confidence in the company’s secular growth prospects.

Intrinsic Value and Long-Term Investment Potential

The intrinsic value derived from discounted cash flow models near $600 per share positions META as a fundamentally sound investment with a built-in margin of safety should the stock price correct. Over the long term, Meta’s robust AI integration, expanding advertising revenue, and investments in immersive technologies position it for exponential growth. Persistent regulatory and R&D investment risks may weigh on near-term performance but are likely to be offset by the company’s scale, innovation capabilities, and platform dominance over time.

META’s stock is suitable for investors focused on technology-led secular growth with an ability to tolerate volatility related to legal and regulatory uncertainties. Its earnings power, significant cash flow generation, and competitive moat around AI-driven advertising present compelling long-term value creation opportunities.

Overall Evaluation

META currently registers as a Hold candidate. The stock exhibits strong technical momentum and fundamental growth drivers underpinned by AI innovation, with earnings and valuation metrics broadly in line with expectations. However, the elevated RSI warns of short-term overextension, and ongoing legal investigations introduce risk. The price exceeds intrinsic value estimates, suggesting limited immediate margin of safety. Monitoring near-term price reaction to legal news and the upcoming earnings release will be critical for transitioning toward a more aggressive bullish stance. For the coming trading day and week, moderate gains or sideways consolidation near resistance are the most probable outcomes.