Both technology stocks and the social media sector have been facing serious commercial challenges recently. In fact, many of the biggest names in social media have struggled to ever demonstrate profitability, most notably Twitter. But Facebook Inc (NASDAQ:FB) continues to deny these conventions and trends, delivering a profitability and share price viability that has been the envy of many of its competitors. Even in a relatively quiet year for this particular niche, Facebook stock has climbed over 7 percent since the beginning of the calendar year.
This comes on the back of a thirty four percent increase in the Facebook Inc (NASDAQ:FB) share price in 2015, with the stock having grown phenomenally by nearly 200 percent since it was initially offered publicly back in May 2012.
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So the debate with regard to Facebook has been whether this already incredibly successful stock could actually shoot higher still. This may seem unlikely considering the fact that it has been difficult for social media companies to compete in the existing marketplace. However, some analysts believe that FB still has great potential, with Brian Belski, chief investment strategist at BMO Capital Markets, recently suggesting that the time has come for investors to once more add technology stocks to their personal portfolios. Belski particularly recommended Facebook, and is not the only Wall Street analyst to be bullish on the stock future of the social media giant.
Wall Street analysts price Facebook Inc (NASDAQ:FB) stock at a median of $135; 20 percent higher than the price the shares trade at today. And while this may be surprising to some market observers, there are clear reasons for the faith in the future of the company.
Firstly, the acquisition of the photo-sharing website Instagram is proving to be extremely successful for Facebook. Instagram is something of a phenomenon in the social media space, with advertising growth on the website been nothing short of staggering. The youth-oriented social media site has managed to acquire 200,000 advertisers in just the six months since first launching this aspect of the website.
Figures indicate that Instagram is miles ahead of competitors such as Twitter in this department, and the success of the image-focused social media website plays a big role in the bullish sentiments towards Facebook Inc (NASDAQ:FB).
Instagram has also managed to attract a vast number of users in its relatively embryonic existence. According to the latest social media analysis figures, Instagram has already attracted over 400 million monthly active users; 18 million more than the nonetheless popular Twitter. And it seems that there is great potential for further growth with Instagram, as the word among young people spreads rapidly. The website can also benefit in the future from further penetrating developing economies and nations in which technology such as social media has yet to become commonplace.
Additionally, despite the prominence and scale of Facebook, the performance of the main application continues to be impressive. With nearly 1.6 billion active users on Facebook, the website was able to grow its monthly users by 14 percent over the last calendar year.
WhatsApp making money
Facebook also owns the biggest and most successful messaging app in the world, WhatsApp, which has already achieved one-billion monthly active users. This application is already beginning to accumulate revenue for Facebook, with the the ability to communicate with businesses and organizations contributing to the profitability of this acquisition.
Despite initial scepticism about the ability of Facebook Inc (NASDAQ:FB) to deliver profitability, the company has made several shrewd acquisitions and has a very resolute and robust business model. The general consensus of opinion is that the incredible Facebook story will continue for the foreseeable future.