Meta stock has serious upside potential, according to Deepwater Asset Management’s Gene Munster, who said things at the company were looking good and will “likely get better.” Meta stock was up over 16% in premarket trade early Friday, after the tech giant reported better-than-expected results and announced its first-ever dividend payment. It ended Thursday in the green at $394.78. Asked whether Meta could potentially become a $700 stock, Munster said: “This is not a formal price target, but yes, I believe this can go up 50% over the next couple of years.” Munster’s call follows fourth-quarter earnings that surprised both investors and analysts. Earnings per share came in at $5.33, compared to the $4.96 expected by analysts polled by LSEG, while revenue was $40.1 billion, compared with expectations of $39.18 billion. Daily active users, monthly active users and average revenue per user also all came in above analyst forecasts. META 1Y mountain Meta stock Munster, managing partner at Deepwater, said there were “a lot of good things to talk about” in the earnings, although one negative aspect was Meta’s massive investments in Reality Labs — the company’s metaverse division. “This is an absurd amount of money they’re spending … [to] try and compete, which I think will be a losing battle with Apple and Vision Pro ,” he added. Dividend surprise Following a massive increase in cash and equivalents on its balance sheet, Meta said it plans to pay investors a dividend of 50 cents a share on March 26. Munster said the dividend news was a “surprise to me , ” but described it as a point of strength for the company. “When companies do this, it’s a sign that they feel confident about the future,” he said. “For me, the bigger picture of what’s happened here is just their confidence about what their company is going to look like in the back half of ’24 has increased.” Looking more broadly at the results, Munster said the company’s underlying metrics gave him confidence that “the absolute right move here is to continue to hold Meta shares.” “I think that things are good at Meta , but they will likely get better,” he added. — CNBC’s Jonathan Vanian contributed to this report.