After the US market closed yesterday (April 30), Meta (NASDAQ:META) released its latest quarterly earnings. Meta stock has jumped 6.6% in pre-market trading and looks set to open higher. After a rocky few weeks, I’m interested in seeing if this could be the catalyst to spark a bigger rally.

Plenty of positives

If we rewind back to February, tech stocks like Meta took a hit. Investors started worrying that too much was being spent on AI infrastructure. The concern around this investment (running easily into the tens of billions for Meta this year alone) was that it could take a long time to monetise AI products. There was also concern about cheaper models such as DeepSeek popping up out of China and taking the shine away from the US giants.

Some of this was put to bed with the latest results, which showed almost a billion active monthly users of AI glasses and Meta AI. Accross the family group of products and media services, March had a staggering 3.43bn daily active people.

Finances also showed promise, with revenue up 16% versus the same quarter last year. Net income rose by 35%. Interestingly, the forecast capex spend for the rest of the year was upgraded. It’s now expected to be in the range of $64bn-$72bn, increased from the prior outlook of $60bn-$65bn. The report noted that “this updated outlook reflects additional data center investments to support our artificial intelligence efforts.”

Clearly, the push is still AI, but based on the initial share price reaction, investors see this as a good thing.

Share price potential

Even with this short-term bump, the share price will still be flat versus where it started the year at. Over the past year, the stock is up 25%, but is a way off the highs from early February this year.

The current price-to-earnings ratio is 21.3. This might seem high to UK investors, but for a US growth share, this is actually good value. By comparison, Microsoft is at 31.8, and Apple is at 30.5. So, when looking at the big tech companies, I believe that Meta is the most attractive based on valuation.

Meta isn’t as impacted as other companies by tariff uncertainty. Given that the apps’ operations are not really hardware, import tariffs don’t have a large impact on the business. As investors realise this, it could help the stock rally in the medium term.

Regulatory worries

The main risk I see to my view is regulatory. The report discussed “legal and regulatory headwinds in the EU and the US that could significantly impact our business.” If forced to sell some apps or break up divisions to increase competition, it could hurt the share price.

Even with this concern, I think the stock could do well in coming months and am seriously thinking about adding it to my portfolio.