Meta owns several of the major social media platforms including Facebook, Instagram and WhatsApp and has around 3.43 billion active daily users across its main platforms.1 Discover how to buy Meta shares.
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*Other fees may apply
Meta shares are listed on the US Tech 100 (.NDX) under the ticker META. Because it’s a US stock, you’ll need to pay a FX fee when buying it from the UK.
Before you start investing in Meta stock, it’s important to develop an investment plan that can help manage any potential risks. Here’s some things to keep in mind:
Having clear reasons for investing can help to inform key choices such as the amount of capital you’re looking to put in and the length of time you plan on holding your position before potentially taking profit.2
It’s also essential to remember that investing comes with risk, so it’s important to consider whether you can afford to lose money if the market moves against you.
Although it’s never guaranteed, investing can offer greater returns than cash savings, particularly if they’re held over several years. If you anticipate needing the money in the short term, then shorter term strategies are recommended.2
Financial markets can be volatile and there’s always the chance you could lose the money you put in. Having a solid risk management strategy can help mitigate these risks.
This could include:
Fundamental analysis is the study of a company’s financials, including external factors that may affect these figures. It’s important to do thorough fundamental analysis before buying Meta shares.
P/E ratio is one of the most popular valuation metrics, which defines how much you have to spend to make £1 in profit. It is calculated by dividing a company’s market value per share by its earnings per share.
A high P/E ratio could indicate that shareholders are expecting earnings to rise, or that the stock is overvalued. You should always compare P/E ratios of the company they are interested to that of its competitors.
ROE is another good measure of Meta’s financial standing, indicating how much income it is making on its assets relative to its shareholder investments.
To calculate ROE, you’d divide Meta’s net income by its stakeholder equity. A high ROE could mean that Meta’s shares are undervalued.
A business model refers to the different ways a company generates profit.
Meta’s business model is predominantly based on providing its platforms to users for free in exchange for data, which allows them to deliver targeted advertising through news feeds. Companies pay Meta to have their ads delivered to a very targeted audience, and this is how Meta makes money.
Meta doesn’t sell user data to any third party, they only use a personalised algorithm to deliver the most suitable ads to users.
The company is also generating income from its Reality Labs which creates and develops its Oculus VR headsets and provides apps and games for customers to use on the headsets.
Log in to IG Academy to learn more about fundamental analysis and different ratios.
Alongside Apple and Microsoft, Meta is one of the biggest tech companies in the world.3 Previously known as Facebook, the company has consistently performed well since its creation in 2006 and now brags around 3.43 billion active users a day across its main platforms.1
Much of its success can be attributed to CEO Mark Zuckerberg’s ability to understand and meet user needs. From facilitating human connection to leveraging data to create personalised experiences, Meta has consistently positioned itself as one on the leading social media platforms. Its strategic acquisition of Instagram and WhatsApp also has also helped cement this idea and allowed the brand to expand into new audiences.
The company remains innovative and is now investing heavily in AI and could still see growth potential and it could be a good way to gain exposure to the AI and tech industries.2
After opening a position in Meta shares, it’s essential you monitor your position through our trading platform. Market movements can be volatile so it’s worth staying up to date on factors that can impact stock performance like recent market news.
Footnotes:
2 Please note a profit is never guaranteed and there’s always the risk you could lose money