Meta Platforms Posts 26.2% Revenue Growth in Q3 2025, Fueling Stock Rebound Hopes Amid Strong AI-Driven Ad Recovery
Meta Platforms (META) delivered another strong financial performance in the third quarter of 2025, reporting a dual beat on both revenue and earnings per share (EPS). The core driver of this success was an accelerated year-over-year revenue growth rate of 26.2%, signaling a robust recovery in the company's advertising business, largely powered by artificial intelligence (AI) advancements.
Financial Strength and Cash Generation
The Q3 2025 results underscore Meta’s strengthening financial position. Beyond the top-line growth, the company saw significant expansion in its EPS and generated substantial cash flow. Cash from operations grew significantly during the quarter, reaching $30 billion.
This robust cash generation supports aggressive investments in both AI infrastructure and the long-term vision of virtual reality, all while maintaining a fortress financial position.
The company’s core business, centered on its Family of Apps, continues to thrive, leveraging AI to improve ad targeting and performance. This operational efficiency and user growth are key factors helping to offset persistent challenges in other segments of the business.
AI-Powered Ad Recovery Drives Core Business
Meta’s AI-powered ad recovery is boosting the probability of a sustained stock rebound. The 26.2% revenue growth in Q3 2025 exceeded market expectations and reflects ongoing improvements in AI-driven ad performance across the platform.
Despite the strong performance and expanding exposure to the rapidly growing AI sector, analysts note that META stock currently trades at:
- Attractive current and forward valuation multiples.
- No significant premium compared to its historical averages.
- Positive earnings revisions following the Q3 report.
The strong core business, coupled with active AI advancement and sustained user growth, provides a supportive financial backdrop for the company, even as it navigates external pressures.
Historical Stock Performance Signals Potential Rebound
For investors concerned about recent price movements, historical analysis suggests a strong potential for recovery. Over the last 10 years, Meta Platforms stock has attracted buyers at price levels similar to the current range (around $650) on three separate occasions. Following these instances, the stock subsequently delivered an average peak return of 14.8%.
While Meta’s stock is not immune to substantial declines—having experienced annual revenue growth as low as 7.5% over the past three years—the current fundamental strength, driven by AI and cash flow, suggests a high probability of a bounce back.
Reality Labs Remains a Drag Amid Regulatory Headwinds
While the core advertising business is flourishing, the company still faces significant headwinds that temper enthusiasm.
- Reality Labs: The division responsible for Meta’s virtual reality and metaverse initiatives remains a financial drag on overall profitability.
- Regulatory Challenges: The company continues to face ongoing regulatory and content-related challenges globally, which introduce an element of risk to future operations.
However, the strength of the Family of Apps and the substantial cash reserves are currently sufficient to absorb these costs and challenges, allowing Meta to continue its aggressive investment strategy in future technologies.
