What happened

Shares of Meta Platforms (META -1.38%), parent company of Facebook, Instagram, WhatsApp, and Oculus, gained ground on Friday after some bullish commentary from Wall Street. The S&P 500 was down a sharp 1.5% as of 12:30 p.m. ET, highlighting Meta's 3.4% gain.

So what

Wall Street's bullish commentary came from Doug Anmuth, an analyst with J.P. Morgan. According to The Fly, Anmuth believes Meta has had a tough year but that it's getting its expenses under control. Under this assumption, Anmuth is modeling out future profits for the company. And based on the models for 2024, Meta stock looks cheap.

Anmuth had been neutral on Meta stock with a price target of $115 per share. However, the analyst now believes it has upside and has given it a price target of $150 per share -- about 24% more upside from here. That's why the market was feeling more optimistic about this stock today.

To one of Anmuth's points, it has been a hard year for Meta. Revenue through the first three quarters of 2022 is flat from the comparable period of 2021. And income from operations has dropped 34%.

Now what

Meta's management has promised to be "leaner" and the stock jumped 27% in November due to some cost-saving initiatives. However, these cuts need to be kept in the broader context of all the money the company continues to spend to realize its metaverse ambitions. And it's still forecasting expense growth in 2023. So I'd stop short of saying that Meta is firmly on the path toward Anmuth's projections for 2024.

Meta is still hitching its wagon to the metaverse. It can cut costs here and there. But long-term, the company needs the metaverse to succeed to justify the costly investment. And that's what I'd be watching if I were a shareholder.