1 Reason to Buy Meta Stock Now and Hold for the Long Term

Meta Platforms (NASDAQ: META), the owner of Facebook, Instagram, and WhatsApp, makes nearly all of its money from ads. As of Oct. 22, the stock is down about 10% from its September high of $779.82. This is despite a strong third-quarter earnings report, with revenue growing 26% year over year.

One reason I see the dip as a buying opportunity is that Meta is building new revenue streams that could make it an even stronger business over time. Meta's non-ad revenue from its apps grew 59% to $1.1 billion. Management said this growth came mainly from WhatsApp paid messaging -- businesses paying to message their customers on the app -- and subscriptions.

Another non-advertising revenue stream is Meta One, a subscription service that unlocks extra features across the company's apps, which has passed 15 million subscriptions and trials. That's less than 2% of Meta's total revenue today, but it's growing more than twice as fast as the company overall.

The runway is long. Meta estimates at least 500 million small businesses use its apps to reach customers, a ready-made market for paid messaging and AI business tools. CFO Susan Li said the company is starting new AI businesses that could start contributing to revenue growth in 2027, with the potential to scale "meaningfully" over the long term.

The main near-term headwind for the stock is heavy spending: Meta plans to spend up to $145 billion on capital expenditures this year, but management expects strong revenue growth to continue in 2027.

Meta stock trades at about 19 times analysts' 2027 earnings estimate -- roughly in line with the S&P 500's average forward multiple of 19.3. I believe that's a reasonable price for a business with a daily user base of over 3.6 billion and the ability to reach new users through AI services over time.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.