Since Donald Trump’s election, the broader stock market has largely rallied, but some tech stocks, including Meta Platforms (NASDAQ:META), are facing uncertainties. This article explores what Trump’s presidency, alongside Tesla (NASDAQ:TSLA) CEO Elon Musk as a key advisor, could mean for Meta stock’s future, especially given Musk’s potential influence over regulatory policies and his tense relationship with Meta’s leadership.
Trump’s Complicated Relationship with Meta
Big Tech has had a strained history with Trump, particularly platforms like Facebook. Following Trump’s ban from Facebook in 2021 after the Capitol Hill events, the relationship between Meta and Trump became even more complex. Although Trump’s account has since been restored, his own social platform, Truth Social, is now a competitor. This rivalry could make Meta’s future under Trump somewhat unpredictable.
Adding to the uncertainty, Trump previously opposed a TikTok ban. The Biden administration pushed a bill that could restrict TikTok in the U.S., which would benefit Meta and Snap (NYSE:SNAP) as they vie for digital ad revenue. However, Trump’s current stance against a TikTok ban could mean Meta loses a competitive edge in the short-form video space.
Tensions Between Zuckerberg and Musk
Meta CEO Mark Zuckerberg and Elon Musk have long had a contentious relationship. Now, with Trump appointing Musk to lead the Department of Government Efficiency (DOGE), Meta investors are wary of how Musk’s influence might affect Meta’s strategies. This advisory role could give Musk considerable sway in shaping technology regulations, particularly around artificial intelligence (AI), an area both Meta and Tesla are heavily invested in.
Musk has been outspoken about the need for AI regulations, voicing concerns over the technology’s potential risks. Meta, one of the early adopters of generative AI for advertising, would likely be impacted by Musk’s push for stricter AI policies, potentially adding operational costs and compliance burdens.
Regulatory Scrutiny: A Persistent Challenge
Regulatory issues remain a prominent concern for Meta. The Federal Trade Commission’s (FTC) antitrust case against Meta is set to move to trial, casting a shadow over the stock’s outlook. Under current FTC Chair Lina Khan, Big Tech has faced increased scrutiny; however, Khan is expected to be replaced under Trump’s administration. A potential shift in FTC leadership could ease regulatory pressures on Meta, though uncertainty will persist until a new chair is appointed.
Furthermore, Meta’s reliance on Chinese advertisers poses an additional risk if Trump reinitiates trade tariffs on China. This could dampen Meta’s revenue growth, as Chinese advertisers have contributed to its earnings in recent quarters.
Meta Stock 2025 Forecast: Analysts’ Perspective
Sell-side analysts generally maintain a positive outlook on Meta, with a “Strong Buy” consensus rating. According to analysts, Meta’s mean target price is approximately $650.74, with potential for a 12% increase from recent levels. Despite this optimism, some market participants express caution, given Meta’s high valuation and anticipated slowdown in revenue growth.
Stifel analyst Mark Kelley has highlighted that, while a Trump presidency may not significantly harm social media companies like Meta, it also may not help them in capturing more ad budgets without a TikTok ban. Kelley remains neutral on the impact of Trump’s administration on Meta but advises investors to consider Meta’s rich valuation and regulatory risks.
Should Investors Buy or Sell Meta Stock?
Meta’s stock may appear attractive due to its continued AI innovation, but investors should also consider potential headwinds. The company’s year-over-year revenue growth is expected to decelerate to 14.6% in 2025 from 20.7% this year. Costs associated with AI development and increased hiring further complicate Meta’s growth trajectory.
Meta’s regulatory challenges and high valuation suggest that the stock may experience limited upside in the near term. While Trump’s presidency may bring some relief from stringent regulations, Meta still faces significant operational challenges. Additionally, the FTC’s antitrust case could be an overhang for the stock, similar to the impact Alphabet (NASDAQ:GOOGL) has felt from its regulatory issues.
In summary, while Trump’s administration might not be overtly negative for Meta, investors should carefully consider Meta’s high valuation, regulatory challenges, and projected revenue slowdown before making investment decisions in 2025.
Featured Image: Megapixl
