Meta Platforms’ (NASDAQ: META) stock has surged approximately 180% in the last year, flirting with its all-time highs. Investors flocked back to the social media behemoth following a resurgence in its advertising business, coupled with augmented share buyback and dividend initiatives by management.
The recent uptrend pushed Meta’s market capitalization beyond the trillion-dollar mark earlier this year, currently resting at $1.2 trillion. Nevertheless, Meta still lags behind Apple (NASDAQ: AAPL), which, for the past three years, detrimentally impacted the former’s ad sales through enhancements to the user-privacy features of the iOS mobile operating system.
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Now, with Meta’s business firing on all cylinders once more, the question arises – could Meta surpass Apple, currently valued at $2.8 trillion, by 2030?
Meta’s Potential Worth by 2030
Meta experienced a growth slowdown in 2022, facing stiff competition from ByteDance‘s TikTok, broad macroeconomic headwinds in the advertising sector, and the repercussions of Apple’s privacy upgrades. Its Reality Labs division, housing metaverse and AR/VR endeavors, continued hemorrhaging billions per quarter. In that tumultuous year, Meta’s revenue and EPS declined by 1% and 38%, respectively.
However, in 2023, Meta’s revenue and EPS rose by 16% and 73% as its ad business rebounded. Meta countered iOS changes by leveraging AI algorithms for more first-party data, expanded its Reels platform to combat TikTok, and mitigated declining ad prices by boosting ad impressions. Notably, Chinese companies seeking broader international reach fueled 5 percentage points of Meta’s revenue growth for the year.
Analysts forecast a compound annual growth rate (CAGR) of 14% and 22% for Meta’s revenue and earnings, respectively, from 2023 to 2026. At a forward earnings multiple of 24, Meta’s stock appears reasonably priced relative to these projections.
If Meta aligns with estimates and sustains a 15% bottom-line CAGR from 2026 to 2030, projecting an EPS of $46.70, its stock could hover around $1,120 early in 2030, yielding a market cap nearing $2.8 trillion, matching Apple’s current valuation.
Apple’s Potential Worth by 2030
Apple, too, dealt with a sluggish period over the past triennium. In its fiscal 2022, revenue and EPS grew by 8% and 9%, respectively, partly due to the standout sales of the iPhone 12 5G handset. Fiscal 2023, however, saw a 3% revenue dip, alongside near-stagnant earnings, as the 5G cycle waned and Mac sales dwindled post-pandemic. China’s economic deceleration and adverse currency effects compounded the strain.
Analysts foresee a 4% and 8% CAGR for Apple’s revenue and earnings from fiscal 2023 to 2026. Undoubtedly stable, these growth rates appear underwhelming for a stock trading at 28 times forward earnings.
Apple, trading at a premium owing to its safe-haven reputation, may need to diversify beyond the iPhone in the coming years through fresh products, services, and strategic investments. Failure to reinvigorate growth could lead to a contraction in its price-to-earnings ratio.
If Apple hits analyst targets and sustains an 8% EPS CAGR from fiscal 2026 to 2030, projecting an EPS of $10.50, it may sport a $294 stock price, translating to a market cap of $4.5 trillion. A retreat in forward multiples to 20, in line with mature tech firms, would reduce the stock price to $210, with a market cap of $3.2 trillion.
Meta’s Potential Upside Versus Apple
Considering these calculations and forecasts, while Meta might not eclipse Apple by 2030, it possesses significant growth potential surpassing that of the tech giant. For Meta to equal Apple’s current market cap in 2030, its stock would necessitate over a doubling from current levels.
Concurrently, Apple might struggle to match such gains if it continues to churn out single-digit earnings growth while sustaining premium valuations. Unless Apple introduces groundbreaking products or services like the Vision Pro, shifting away from its iPhone dependence will require substantial effort.
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