What happened

Shares of Meta Platforms (META -0.30%) rallied Friday, gaining as much as 4.6%. As of 1:40 p.m. ET, the stock was still up 3.6%.

The improving read on inflation lifted most stocks, but there were several specific catalysts that added fuel to Meta's rise. There were additional signs of a rebound in the digital advertising market, the company was on the receiving end of an upgrade by an investment bank, and reports emerged that Meta is working to boost retention rates for its recently launched Twitter competitor, Threads.

So what

Roku reported second-quarter results after the market close on Thursday, and the company's results seemed to confirm the beginnings of a rebound in the digital advertising market.

The streaming pioneer makes the lion's share of its revenue from the digital advertising that appears on its platform. Revenue of $847 million grew 11% year over year, its best showing since this time last year and adds to the mounting evidence that the dearth of online ad spending may finally be coming to an end -- which would be a big plus for Meta. 

Furthermore, investment bank China Renaissance upgraded Meta Platforms stock to buy from hold, while simultaneously assigning a price target of $380. This suggests a potential upside of roughly 22% compared to Thursday's closing price. While the report was mum as to the reasoning, it comes on the heels of Meta's second-quarter financial report, as the company returned to double-digit revenue growth for the first time since late 2021.

Finally, a report by Reuters suggested that Meta was working to boost retention rates of its recently launched Twitter competitor, Threads. After initially attracting more than 100 million users shortly after its debut, reports suggested that many of the new users weren't sticking around. It went on to suggest that Meta is working to add new features to keep users on the site. 

Now what

Meta Platforms stock has experienced a stunning reversal so far this year. After losing as much as three-quarters of its value, the stock has soared 255% -- though it's still 16% off its high. At less than 6 times next year's sales, it's still near its lowest valuation in a decade.

The continuing recovery of the digital advertising market and the expansion of the company's social media empire suggests now is the time to buy Meta stock before it climbs even higher.