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Facebook Turns 20: A Look at Its Impact and Investment Potential

Meta Platforms Inc.’s META flagship product, Facebook, has reached the ripe age of 20. Despite being a year shy of the legal drinking age in the U.S., Facebook has profoundly influenced information consumption and online connections.

The Facebook of today stands at 3.07 billion monthly active users, cementing its position as the world’s largest and most enduring social network.

The Beginnings at Harvard University

Facebook, initially launched as “Thefacebook” in 2004, aimed at connecting Harvard University students. Its rapid expansion to other elite universities and eventually to a wider audience set the stage for its tremendous success.

The company dropped “The” from its name and rebranded itself as just “Facebook” after securing the domain name in 2005. Notable initial investors included Peter Thiel and LinkedIn CEO Reid Hoffman.

Following its public debut in 2012, let’s examine the journey of Meta stock since its IPO 12 years ago.

Meta stock price from May 18, 2012, to today

Meta’s IPO commenced at $38, and its current stock price of $474.99 represents an exceptional 1,150% surge over this period.

If you had invested $1,000 in Meta stock on May 18, 2012, today, you would have $12,425.

Conversely, a $1,000 investment in an index fund mirroring Nasdaq would yield $5,624, while the same amount in an S&P 500 index fund would be worth $3,828.

Challenges Across Two Decades

Despite its success, Facebook has faced numerous controversies over the last 20 years, from patent disputes to data misuse and the spread of misinformation. Key among these was the Cambridge Analytica scandal, which involved the unauthorized harvesting of millions of Facebook profiles for targeted political advertising.

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Embracing an AI-Powered Future

In 2021, Zuckerberg spearheaded a pivotal shift, rebranding Facebook as Meta and introducing the Metaverse, a virtual reality world fused with artificial intelligence (AI) to enable user interactions.

Meta’s robust AI initiatives include the launch of the Llama large-language model, driven by the expertise of Yann LeCun, known for his groundbreaking work in technology.

Furthermore, Meta unveiled its proprietary AI chips to empower Facebook and Instagram, signaling a move to optimize costs and reduce reliance on Nvidia Corp. NVDA.

During the company’s fourth-quarter earnings announcement, Zuckerberg emphasized Meta’s commitment to developing the “most popular and most advanced AI products and services.” Analyst Dan Ives of Wedbush is bullish on Meta’s future, viewing AI as the next growth catalyst for the company.