It's been a rough year for many of the highest-flying stocks of the recent past. The list even includes quite a few of the biggest and most well-known names in the stock market.

All of the FAANG stocks have dropped significantly so far in 2022. But don't write them off yet. Analysts expect that four of the five stocks in the group will deliver strong gains in the not-too-distant future. Here's the FAANG stock that Wall Street thinks will soar the most over the next 12 months.

Eliminating the contenders

The five FAANG stocks are:

  • Facebook, which is now Meta Platforms (META 2.44%)
  • Amazon (AMZN 2.94%)
  • Apple (AAPL -0.08%)
  • Netflix (NFLX 1.84%)
  • Google, which is now Alphabet (GOOG 1.25%) (GOOGL 1.20%)

We can quickly scratch one of these stocks from the list of potentially big winners. The consensus Wall Street 12-month price target for Netflix is only 5% above the current share price.

Sure, there are plenty of investors who think that the TV streaming stock could be on the verge of a massive spike. However, even with Netflix's share price down more than 60% year to date, that sentiment apparently isn't shared uniformly across the analyst community. 

Wall Street does appear to expect a strong performance over the next 12 months for Apple. The average analyst price target reflects an upside potential of nearly 31%. That's only enough to rank Apple in fourth place among the FAANG stocks for which Wall Street is most bullish, though.

Analysts continue to like Alphabet and Amazon as well. The consensus 12-month price targets for the two stocks are 45% and 54% above the current share prices, respectively.

Crowning the (potential) champion

The process of logical elimination allows us to crown Meta Platforms as the champion of Wall Street among the FAANG stocks. The average analyst 12-month price target for Meta reflects an upside potential of nearly 72%.

What do analysts like about this stock? A couple of things especially stand out.

First, Meta is currently the most beaten-down of the group this year (although it's running neck-and-neck with Netflix for the dubious distinction). Shares of the social media giant and metaverse pioneer have plunged more than 60%.

Second, Meta's valuation metrics look more attractive overall than the other FAANG stocks. Its shares trade at only 10.7 times expected earnings. This number is well below the forward earnings multiples of the other stocks. Meta's price-to-earnings-to-growth (PEG) ratio is around 1.5. That's second only to Alphabet's PEG ratio of 1.2.

Is Wall Street right?

We'll have to wait a while to find out whether or not Wall Street's optimism about Meta is warranted. The company certainly faces significant challenges.

Apple's privacy update for iOS continues to negatively affect Meta's advertising business. TikTok appears to be winning some teens away from Instagram. Meanwhile, Meta is investing billions of dollars each year in a metaverse bet that may or may not pay off.

However, some analysts see better days ahead. Oppenheimer's Jason Helfstein recently pointed out that Apple's forthcoming update of its ad software could provide a big tailwind for Meta. Apple is adding back some features that it previously took away.

Another analyst, Ronald Josey with Citigroup, likes the prospects for Reels -- a short-form video feature available on Facebook and Instagram. Meta Platforms CEO Mark Zuckerberg stated in the company's Q2 conference call that user engagement with Reels continues to increase sharply. 

The biggest wild card for Meta is whether or not the metaverse takes off as the company expects it will. There's some reason for skepticism right now, especially considering that Meta's own employees don't seem all that excited about the metaverse.

But Meta just picked up a major vote of confidence in its metaverse vision from Microsoft. The software giant plans to integrate its workplace apps with Meta's Quest devices. 

It's going to take more than 12 months to find out whether Meta's huge bet on the metaverse was a mistake or a brilliant move. If it's the latter, this FAANG stock will soar a lot more than what Wall Street is predicting for the near term.