As the owner of Facebook, Instagram, and WhatsApp, Meta Platforms (NASDAQ: META) is already a very established growth stock in the S&P 500. That’s hardly surprising when nearly half the planet regularly use at least one of the firm’s apps!

This activity generates copious amounts of user data, which is an advertiser’s dream. This supports high-margin growth at Meta.

In 2024, the firm’s revenue grew 22% to $164.5bn, while net profit jumped 59% to $62.4bn. However, if CEO Mark Zuckerberg put growth initiatives on ice and focused purely on maximising profits, Meta’s earnings would be significantly higher.

Yet ambitious Meta is focusing on areas that could have significant long-term growth potential. Here are three of them. 

Monetising WhatsApp

Recently, Meta said it will bring ads to WhatsApp for the first time since it acquired the messaging app 11 years ago. The firm is already encouraging firms to interact with customers on there, but showing ads within the ‘Updates’ tab is new.

Whether this catches on is anyone’s guess. It could even backfire if people suspect the privacy of their conversations is at risk.

On the other hand, it’s clearly a massive opportunity, as WhatsApp has over 3bn monthly users. If Meta can scale this over time to earn $10 per user per year, that’s tens of billions in high-margin revenue — without building a new platform.

All-in on AI

The company is also using cutting-edge AI to serve more targeted ads, tailor content, and boost engagement on its platforms.

In Q1, upgrades to its recommendation algorithms led to 7% more time on Facebook, 6% on Instagram, and 35% on Threads.

Better ad targeting improves return on investment (ROI) for advertisers. And more powerful AI is only likely to improve Meta’s ability to show relevant, clickable ads to users.

AI hardware

Unlike clunky VR headsets, there’s growing consumer interest in AI-powered glasses. Building on its Ray-Ban Meta glasses, the firm has teamed up with Oakley to release smart glasses. They connect to the Meta AI app and have a personal AI assistant built in.

I see obvious benefits to these cool-looking glasses. You glance at a tapas menu written in Spanish, and say: “Hey Meta, what does this say?” The built-in camera captures the text and translates it via the open-ear speakers next to your ears. 

Also, when someone is speaking French, Italian, or Spanish, you can now hear what they say in English in real time.

“Hey Meta, take a video.” That would be great for parents wanting to capture footage of their kids without fumbling for a phone.

More than a billion people worldwide wear glasses today, and it seems highly likely that these will become AI glasses over the next five to 10 years.

Mark Zuckerberg.

Valuation

The obvious near-term risk for Meta is an economic downturn. In this scenario, some companies would pull back on ad spending, thereby impacting the firm’s growth.

Another issue is increasing regulatory scrutiny, especially in Europe. However, Meta could plausibly argue it’s not monopolistic when it faces stiff competition from TikTok, X, YouTube, Snap, and others.

The stock is trading at a reasonable 28 times forward earnings. Given the significant growth potential of WhatsApp ads and AI-powered glasses, I’m eyeing up the stock for my ISA.