Is Meta Platforms Stock Underperforming the S&P 500?

Meta Platforms, Inc. (META) is a technology company focused on connecting people through social platforms such as Facebook, Instagram, Messenger, and WhatsApp. The Menlo Park, California-based company also develops artificial intelligence, mixed reality, smart glasses, and other technologies designed to advance digital communication and immersive experiences. It has a market capitalization of $1.5 trillion.

Companies worth $200 billion or more are generally described as “mega-cap stocks,” and META definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance within the Internet Content & Information industry. META stands out through its massive 3.5 billion-plus user base, leading digital advertising business, and advanced AI capabilities. Its sophisticated targeting generates strong advertiser results, while powerful cash flows fund AI investments. WhatsApp, Instagram, Facebook, and emerging AI products provide multiple opportunities for long-term revenue growth.

Despite its notable strengths, META has slipped 27.8% from its 52-week high of $790.80, reached on September 19, 2025. Over the past three months, META stock has plunged 10.1%, underperforming the S&P 500 ($SPX), which has gained 2.8% over the same period.

Shares of META have declined 13.5% year-to-date and 23.6% over the past 52 weeks, considerably underperforming the S&P 500’s 12.9% YTD gain and 19.3% return over the past year.

META has been trading below its 50-day moving average since mid-August and its 200-day moving average since mid-July, underscoring a bearish trend.

META lagged the broader market as heavy AI investments sharply reduced free cash flow, while AI offered less incremental upside than it did for rivals selling AI infrastructure. Limited new growth catalysts and high exposure to advertising also raised concerns about weaker consumer spending and ad budgets. However, on Jul. 30, META shares closed down about 8% after the company reported its Q2 results. Its EPS of $6.18 missed Wall Street’s expectation of $7.10, while revenue of $60.8 billion surpassed estimates of $60.21 billion.

In the competitive Internet Content & Information industry, Alphabet Inc. (GOOG) has outperformed META, showing resilience with a 7.6% gain year-to-date and a 62.2% gain over the past 52 weeks.

Wall Street analysts are bullish on META’s prospects. The stock has a consensus “Strong Buy” rating from the 55 analysts covering it, while the mean price target of $751.08 suggests potential upside of 31.5% from current price levels.