Meta Platforms (META) is rewarding its shareholders with a 5% dividend hike as META stock hits its 18-day winning streak on the Nasdaq 100 (NDX). Notably, Meta’s revised dividend will now increase its quarterly cash dividends to $0.525 per share and $2.10 on an annualized basis. The current dividend yield is 0.28%, much lower than the sector average of 1.9%. However, it’s a good growth for Meta since it started paying dividends of $0.50 per share only in the first quarter of Fiscal 2024.
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Meta’s dividend hike also comes as a relief to fretting investors who worry that the tech giant is spending excessively on AI (artificial intelligence) ambitions. After announcing a $65 billion AI spend for FY25, CEO Mark Zuckerberg defended the stance to investors by stating that it is the best time to invest in the fast-paced AI world and reap massive benefits in the long term.
Here’s What’s Brewing at Meta Currently
Interestingly, Meta stock has been on an unstoppable winning streak, the longest one on record on the Nasdaq 100 for the stock since 1990. Meta stock has risen continuously over the last 18 trading days since January 16. This rally comes from Meta’s massive AI ambitions, with Zuckerberg’s optimism fuels more bullish investor sentiment. Year-to-date, META stock has already gained 24.4%.
In other news, Meta Platforms has agreed to allow rival classified ad services to list on its Facebook marketplace, after losing an antitrust case in the European Union. Meta was fined roughly $846 million (€797 million) for its monopolistic practices on its Facebook marketplace in the EU in November.
Furthermore, Meta has mildly changed its accounting practices for AI infrastructure depreciation. This change will allow it to increase the accounting life of its depreciable assets to five and a half years and reduce the related depreciation expenses. In effect, it will result in Meta reporting higher net income. In 2025 alone, this change is expected to cut its depreciation expense by a notable $2.9 billion.
Is Meta Platforms a Good Investment?
Wall Street certainly seems to be highly optimistic about Meta stock. On TipRanks, META stock has a Strong Buy consensus rating based on 44 Buys, three Holds, and one Sell rating. Also, the average Meta Platforms price target of $764.61 implies nearly 5% upside potential from current levels. In the past year, META stock has gained 54.5%.
