Meta Platforms Inc's (NASDAQ:META) Instagram has the potential to generate 50% of the company's advertising revenue in the U.S., Bloomberg cites from Emarketer estimates.

Instagram could breach $32 billion in U.S. advertising revenue in 2025, up over 24% in 2024, as its short-form video product Reels gain traction, Bloomberg cites Emarketer. The video-sharing app boasts over 148 million American users.

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By early 2022, Instagram accounted for nearly 30% of Meta's global business from 27% in 2021, Bloomberg cited court filings.

Reels competes with ByteDance's TikTok and Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) YouTube Shorts.

Meta's focus on video content has been instrumental to its growth, as users devoted nearly 67% of their Instagram time to surfing videos, Bloomberg cited Jasmine Enberg of Emarketer.

The TikTok ban could serve as a tailwind for Instagram, helping it win over 20% of reallocated TikTok ad dollars in the U.S, Reuters cites Enberg.

Meta previously told Instagram Reels accounted for over 50% of the time people spend on the app.

In 2024, 53.7% of Instagram's ad revenue primarily came from its Feed features and 24.6% from Stories features. With Reels' revenue boost, the combined revenue share from Instagram Explore, Reels, and Threads could rise 9.6% in 2025.

In October, BofA Securities analyst Justin Post projected Meta's upside from ramping up Messaging and Reel monetization powered by new artificial intelligence tools and CRM integration.

Meta Platforms stock surged 79% year-to-date. Investors can gain exposure to the stock through Vanguard Communication Services ETF (NYSE:VOX) and The Communication Services Select Sector SPDR Fund (NYSE:XLC).

Is Meta A Good Stock To Buy?

An investor or trader's decision to buy or sell a stock is unique to their time horizon and risk tolerance. Many typical investors evaluate earnings growth and valuation on a particular stock before making a decision.

For example, for Meta Platforms (NASDAQ:META), you'll notice that earnings in its last quarter grew 14.86% source. As an investor, you'll want to decide whether that's better or worse than what you'd like to see among stocks in your portfolio.

On the valuation side, Meta Platforms's price to earnings ratio – a measure of how much an investor pays for the company's earnings – is compressed 15.56% in the current quarter when compared with last year. That places it below similar businesses Alphabet, Baidu, Pinterest in its sector. You'll need to decide whether that makes it more or less attractive based on how you think the company will perform over time.

There are many different valuation metrics that may help you make a decision. Find more on Meta Platforms's quote page, or if you'd like a deeper dive in an advanced program, try Benzinga PRO for free.

Price Action: META stock is up 1.15% at $626.545 at the last check on Wednesday.

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