Facebook (NASDAQ:FB)
Facebook has had an incredibly strong performance in the market for years. That’s what has led the stock to a value of well over $100 per share from its opening price below $40 just a few years ago. However, some analysts have been quoting as saying that Facebook could grow to break the $250 per share mark. These analysts point to virtual reality as the reason. However, is $250 per share a realistic expectation for FB?
The Most Interesting Part Of These Types Of Predictions Surrounding FB
There’s no doubt that Mark Zuckerberg is a genius. There’s also no doubt that Facebook is the leader in the social media space. However, the predictions that say that the stock will reach $250 per share say very little about the gains coming from social media.
Let’s face it. When we talk about FB, we’re talking about a social media giant that has turned its website into a way of life for many. Sometimes I think that my fiance, her mom, heck, even my mom might die if the website were to ever go offline for good! However, the analysts that see the stock more than doubling in value see the future of Facebook’s profits coming largely from virtual reality.
If this is the case, it will definitely be a tidal shift for the company. In order to make it big in virtual reality, Facebook will be selling products, not advertising. At the end of the day, that’s a completely different business model.
Is $250 Per Share Profitable With The Help Of VR?
First and foremost, I can say that Zuckerberg didn’t shell out more than $2 billion to get involved in an industry that he didn’t think would be profitable. Who would? However, will VR really have the ability to more than double the total value of FB? In my opinion, the answer is yes.
You see, with Oculus, Facebook isn’t simply going to offer a gaming experience. Sure, gaming is going to be a big part of it, but that’s not all Oculus will do. The truth is that Zuckerberg sees augmented reality and virtual reality as a wave of the future. This is how he believes people will be searching the web, purchasing products, and you guessed it, socializing!
This gives FB a pivotal edge above the competition. You see, FB can use its social network to turn oculus not only into an augmented reality experience, but to give users a way to share their experience with other users. The depth of knowledge that the company has in the social networking space will give it all the tools it needs to drive Oculus to be a leader in Virtual Reality.
With all of that said, $250 a share is long off. However, it’s not completely out of the question. If the company is able to realize the level of success that it has in social media, but to do it through virtual reality as well, the sky really is the limit!
Should You Buy FB Right Now?
If you’re buying the stock in hopes that it will climb to $250 per share over the next quarter, or even over the next year, you’re making a bad move. However, I wouldn’t say not to buy it. Historically, FB has had incredibly strong performance and continues to make moves that will push the stock to grow further. Regardless of whether or not $250 is hit, there are profits to be made here.