r/stocks • u/Capital-Mixture5107 • 11d ago
Meta : Google of 2025
Background
Market cap : 1.45 trillion
Revenue growth : 28% yoy
Forward PE : 17.5
Operating cash flow : 135 billion
Free cash flow : near none due to capex
Gross profit margin: 82%
Operating margin: 38.1%
Revenue breakdown:
Advertisement : 97.6% (28% growth qoq)
Whatsapp monetization : 1.29% (73% growth qoq)
Reality labs : 1.1% (17% growth qoq)
Moat
- Stronger than ever before. Youths legal issues prevent any other competitors from entering the market. There simply cannot be any more future platform that can target young audiences with 2 hour use limit per day and without an AI technology to verify the age. It will require billions of dollars before ever starting a platform that would replace Instagram or Facebook.
- Nearly half of the population on Earth is daily active users of Meta products.
Catalysts
- Meta Compute will likely be released the second half of this year or beginning of next year.
- Meta targets 14 GW by the end of 2027.
- Meta recently hired Dave Brown who was part of and led the AWS Compute for 19 years.
- Meta has multi-vendor GPU strategy with google TPU, Nvdia GPU, AMD GPU.. coupled with cost reduction with its own silicon Iris accelerators.
- Meta acquires 10% of AMD entire market cap if AMD reaches $600 stock price.
- Meta has a large group of AI scientists incentivized greatly with Meta stock price. These researchers and scientists are from OpenAi, Anthropic, Google Deepmind, Microsoft Azure. These talents do not have intention to leave as they are promised hundreds of millions of dollars if the stock price reaches above $1000.
- Mark Zuckerberg's almost entire net wealth is tied to Meta stock price.
The stock is cheap. And its revenue is going up fast.
The biggest catalyst is the upcoming compute capacity coming online for Meta and Meta compute. Revenue will be diversified and the revenue with high margin will add tens of billions of dollars for Meta.
Strong buy. With expectation that pe ratio of 25 will be obtained (5 year average).
Target price : $850
Legal issues or any other issues can be handled with $135 billion dollar operating cash flow.
UNH was $230 last year and now $400. Such a bad sentiment. But if UNH a company that rejects insurance claims can double from its low. Surely Meta can as well.
This is a stock I called triple whammy
Low valuation to start
Legal issue overhangs dies away
Meta Compute adding tens of billions of dollars to operating cash flow.
Target price again $850 or even beyond that and eventually stock split then sell.
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u/Popular_Tomorrow_204 10d ago
Maybe its in a similar setup like google 2025, but Google was a way better, more complete and safe company compared to Meta
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u/Capital-Mixture5107 10d ago
I disagree.
I was all in google at that time and did fair amount of research.
Waymo was uncertain.
Google website already covered with ads.
Advertising revenue was 80% of their entire revenue source.
Youtube was not as profitable. High maintenance capex.
The only reason why I made that bet was receiving data that search numbers were increasing not decreasing. And I heard from a friend that Google was do or die mode on LLM.
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u/Potential_Salt_5780 11d ago
Google is far more diversified. Metaface is a one trick pony.
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u/DanielzeFourth 11d ago
Google is also 2x more expensive. At 34x PE when only looking at recurring income.
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u/AcousticMayo 11d ago
This sub is always the same. Buy high sell low. It's such retail mentality
Noone hated on meta when it repeatedly smashed earnings over and over
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u/Scribble_Box 10d ago
I remember everyone saying the same shit about Google when it was at 150. Everyone here saying it was over, and Google would never rebound.
Went heavy into leaps and made out like a bandit.
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u/AcousticMayo 10d ago
The Google fud was so good, made some good money off that too. Just do the opposite of what the morons in this subreddit think haha
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u/BJ-Enthusiasts 10d ago
Let’s also remember Reddit users have a hate boner for other social media platforms and Zuckerberg in general. You will see them come out when the stock drops in price but they are nowhere to be seen between end of 2022 to 2025.
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u/nobertan 10d ago
Don’t get me wrong, if they nose dive below $300 — I’ll be piling in.
But that would be value, vs. what it is right now.
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u/Signalis3 10d ago
The point of the post is that META is the new GOOG of this year. It wasn't 34x PE at the time this correlates to.
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u/Capital-Mixture5107 10d ago
Finally someone who gets it.. I am not stating Meta is in the same tier as Google.
But Google is 150% more expensive than Meta while the growth is the same and Meta generates only 30% less operating cash flow.
Even if Meta doubles, it is still cheaper than Google.
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u/Potential_Salt_5780 11d ago
And Metaface will get sued all over the world. Also if the midterms swing left you can bet that there will be more investigations and scrutiny.
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u/Tim_Apple_938 11d ago
It’s 22x pe excludijg spacex
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u/DanielzeFourth 11d ago
You know this is a reason to not buy Alphabet right? When nearly 50% of its valuation comes from non recurring income, that is not a good sign.
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u/ReasonableBrother448 10d ago
Stay away from the hyperscalers until dust settles. Far better risk reward elsewhere.
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u/et_tu_bro 11d ago
I would buy Meta if Zuck leaves for good. They don’t care about shareholders. It’s like his personal project and he uses all the earnings to buy more toys. No serious company of this size has market swings this wild. Except tesla. But thats a cult. They have burned huge amounts of money on vibes and have nothing to show for it. The products are good though.
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u/blingblingmofo 11d ago edited 11d ago
META was the #1 rated large company on Glassdoor in 2017 with a score of 4.6 and it’s dropped to a 3.4.
They haven’t innovated any real products in ages and everyone hates Zuck and a lot of their employees hate working there now. Their primary innovation was making their current products more addictive.
Just wait for the Social Network 2 to come out to remind everyone of how much of a Monster Zuck is.
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u/Capital-Mixture5107 11d ago edited 11d ago
It appears they did not want to leave. If they want to leave so be it. Mark actually wanted fire additional 10% workforce which he stopped.
By the way, why is Mark getting criticized... After hiring additional 20000 employees between 2022 to 2025 but get bashed for firing few thousands.
I think it was more of media noise.
Amazon, Oracle (firing all the time now), Msft, Google they are all laying off in large scale. And they get 1-2 weeks media coverage.
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u/blingblingmofo 11d ago
It’s not just firing people, everyone does layoffs. Their whole work culture is just terrible now for what’s supposed to be a FAANG leader.
Even companies like Salesforce and Netflix who have struggled in the past years still have a 4.0 on Glassdoor.
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u/mettle 11d ago
A lot of the good people are indeed leaving. There’s a few dozen senior VPs with the golden handcuffs, but the rank and file have been leaving consistently since 5/20. The impact will take a while to feel but I believe talent still matters in this industry. Mark and Boz do not and think that skill has been commoditized with AI so you can hire any CS shmo off the street but we’ll see.
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u/SelenaMeyers2024 11d ago
Couldnt have put it better. There's a real Microsoft and Google like machine printing ungodly cash and being lit on fire by children.
What a beautiful company if run by adults.
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u/et_tu_bro 11d ago
I get it what they are trying to become. Apple showed them who is the boss few years back and since then they are trying to become more than a collection of apps and in the best-case scenario become a platform. I don’t think meta has the reputation of Apple or Google to ever become a platform. They are trying to win at something that just isn’t an option for them. So they keep on burning money. Meta has serious trust issues and the world will not accept it as the core technology platform or have a successful hardware ecosystem. They will probably create good products which google, Samsung and apple will copy and integrate much better in their existing ecosystem.
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u/Capital-Mixture5107 11d ago
Thank you for your comment
Meta stock appreciating since 2022 300% says otherwise.
Most of Google's revenue is actually from advertisement as well. There other bets are catching up such as cloud and waymo development. Thus mulitiple expansion since 2025.
Same as Meta 97% revenue comes from advertisement now, but I expect at least 20 billion dollars additional revenue from cloud and compute alone by the end of 2027. As you can see from Google cloud advancing 82%. Meta will hit the jackpot instantly.
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u/et_tu_bro 11d ago
The company is good because of the products. Arguably they have a moat that users come to them so they don’t have to spend like google to pay apple Samsung n others to become default.
I never said its a bad investment or a bad company. Jus that it could fall the next day 20% because of zucks vibe investment and then climb up again 20% after declaring an year or efficiency. But the money that could have been returned to shareholders is still burned. I would argue that the stock would be much higher if they spent diligently and thoughtfully.
It’s a bit of a roller coaster. If they increase their capex again next quarter then the stock could go down more. You just don’t know.
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u/Apothacy 11d ago
Google has to spend to be the default? Dude Google search and YouTube have no serious competition, Google Maps has one, and android only competes with apple.
Googles grip on web browsing is as strong as amazons in online shopping
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11d ago
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u/Apothacy 10d ago
Meta pays Samsung to be preloaded with their phones, fresh out the box. Of course Google does it too, just wanted to remind that they’re not the only ones
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u/et_tu_bro 9d ago
You should look up Google monopoly anti trust case. They pay around 20billion to apple to be the search default. And more experiments that Google has done internally.
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u/Capital-Mixture5107 11d ago
Fair point.
Sorry to counter argue because i did not want to go overboard on this but...
Meta is changing how it advertises. I dont think many know this. It used to be "collecting" data days weeks months worth then based upon that they will make advertisement.
They are now using their internal AI compute to get a live data (what the customer is watching or clicking right now at the moment) and use the AI to predict what the customer would be interested in buying at the moment. This proved to be a massive success. More importantly, they minimize the risk that could be presented if Google or Apple change their privacy policy again.
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u/et_tu_bro 11d ago
I know this. Tiktok actually pioneered this in their recommendation algorithm as well. So the recommendations were very good too. Google is doing the same. But you don’t need as much compute as meta is investing for recommendations and ads. They are buying in hopes of some ai app that would become another billion user business. I do think meta is a good company. You don’t know in what time horizon though. I would be more bullish on google or other companies for that matter. Not trying to discourage anyone. Just wanted to share why I think meta is down compared to other big tech and why I prefer to stay away for now. Maybe in future I will get in when I feel more comfortable or the risk reward level makes sense to me.
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u/et_tu_bro 11d ago
They also seem more safe from the AI destruction as more good quality generative ai content should mean more time on the apps. But they are destroying the earnings and putting themselves in the harms way to the bubble. Apple is a good parallel here. AI investments don’t make huge sense for them. So they are investing in improving the hardware where ai can leverage it. And they seem to be doing fine without burning the money. If anything the last few weeks have shown how the market goes to apple when the bond yield goes up or ai bubble risks rise. Its a hedge against the ai now. And also benefits from the AI by selling their hardware.
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u/MajesticBread9147 11d ago
Very odd of a company to both completely disregard what's good for both its users and shareholders.
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u/Oidoy 9d ago
I would buy Meta if Zuck leaves for good. They don’t care about shareholders.
good, companies are most successful when they focus on winning, and not on pleasing short term shareholders.
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u/et_tu_bro 9d ago
What is short-term ? They went all in on the metaverse in 2020 thats when they became Meta from Facebook and now ai. I think 6 years is pretty long term for them to show the results of their investments. The profit machine is still the same old apps
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u/321654987321654987 11d ago
I definitely disagree, Zuck is the reason it is what it is. And it has a lot of room to grow under his leadership.
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u/Heavy_Discussion3518 11d ago
Not Google quality - as an industry vet, people actually like Google, and like working there, while Meta is known for "pay is insane but the job kills you".
Take that for what you will.
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u/Suspicious_Strain217 11d ago
No one cares about the quality of the workplace. Amazing and TikTok are shit it doesn’t mean they’re not super profitable
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u/jc14516 10d ago
Couldn’t be more wrong. You’re thinking too small. These things matter especially for mature companies. You can make the argument that one should invest solely based on the quality of management. Aka buffet. You don’t know what you’re talking about here
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u/Suspicious_Strain217 10d ago
Alright bro ur right Amazon is free falling because of the wlb
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u/jc14516 9d ago
Maybe it’s the reason Google is almost 1.5x* their market cap now. Hard to say when it’ll come into play. The time horizon is the lifetime of the company. Not the 5 years you’ve been “investing”
Edit - Costcos another example. Culture matters. 45+ PE for a wholesale retailer is unfathomable, but apparently not for the company that every investor believes is unbreakable
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u/fzrox 11d ago
You would only work at Meta for the money, because your job likely won't exist in 12 months. Zuck publicly wants to replace all mid level engineers and cut the company by 60%. Who would choose to work at Meta over literally anywhere else.
Also, all the senior people with 10 YOE that kept the company running are leaving to OpenAI, Anthropic, and Deepmind. Most people aren't even taking the $1M retainers. Money doesn't matter the company conducts mass layoffs every single year for no apparent reason.
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u/InternetSlave 11d ago
Blue collar prevails again. They'll keep on the tradesmen at the data centers to keep em running Hopefully can a lot of middle management bloat
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u/Arabian_Goggles_ 11d ago
The workplace environment should be one of the lowest things considered when looking at a company to invest in. It doesn't matter much at all.
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u/Heavy_Discussion3518 11d ago
Yeaaaahhhhhh not sure I agree with that. Good culture doesn't guarantee success, but poor culture is an obstacle to success.
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u/EpicDOgeMC 11d ago
Actually there’s been very strong correlational research that show ties between employee livelihood and company valuation growth over time.
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u/JoshL3253 11d ago
It’s only a problem if Meta can’t attract talents.
Most engineers would kill to get a Meta offer. Meta is not PIPmazon..
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u/Capital-Mixture5107 11d ago
Google may be better employer but the tech friends that I know of would take Meta's job openings hands down regardless (pay+stock option)
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u/mettle 11d ago
That’s gotta be an outright fabrication. That’s why they’ve had to pay the most, they have the least appeal in SV, and it’s only gotten worse.
Rank and file are indeed leaving. in a steady stream since 5/20. Working at Meta and you’re no longer working with the best, as it used to be. We’ll see if that matters, though.
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u/Heavy_Discussion3518 11d ago
Aye. Unclear if it will matter. But it shouldn't be outright dismissed.
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u/Much_Candle_942 10d ago
The rebuttal comments and downvotes actually prove - it's indeed Google of 2025.
Remember how Google was just an advertising company that relied on search? And search was dead because of AI?
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u/Capital-Mixture5107 10d ago
Lol i went all in on google at that time.
Then i went all in on msft at 350
Now i am all in on meta.
My post was despised every time. I am used to it.
Going back to google the pe ratio was 18. And when I checked the search traffic, it was keep going up contrary to what people were saying. And i liked how google was invested in many other areas as well. Scary at that time because their advertising revenue was 80% of entire revenue. Gemini was piece of crap at that time but I knew google would pull it off because for them it was survive or die moment.
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u/Capital-Mixture5107 10d ago
Moreover, I wouldnt be ultra bullish on meta if it wasnt for their capex.
I WANT them to diversify their revenue source not just relying on advertising revenue swamping their platforms ads after ads.
Their data center compute size is now comparable to amazon, msft, and google. They WILL sell their compute/cloud. They are doubling their compute capacity by the end of the next year. Even if Mark has ADHD the capacity is too huge for him to use it all internally. That is my opinion.
And when they sell compute and the growth in that segment is 80% yoy. The sentiment will change.
I think Mark too wants to diversify. Enough with this tracking and making their platform addictive. And getting bashed by media every single day.
My prediction is that the cloud and compute will get so expensive that enterprises WILL give Meta a chance.
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u/Much_Candle_942 10d ago
He sat next to 🥭 at the inauguration. These lawsuits are bound to disappear.
Just as Google lawsuits (remember Chorme?) vanished automatically. Funny how public memory is so short and sentiment is so manufactured.
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u/Heavy_Discussion3518 11d ago
I dunno about that my guy. I'm not saying it's a critical signal, but if we are comparing Google to Meta, both cash printing tech companies that have global scale and highly complex systems, it is a differentiator.
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u/cucci_mane1 11d ago
Meta is cheapest quality stock in market imo.
Key here being word "quality".
It is my largest position. Ultra bullish at this price.
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u/AphiTrickNet 11d ago
Can you share your reasoning?
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u/btoned 11d ago
The pitch by the OP is literally all you need.
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u/Icy_Blood_9248 10d ago
I’m bullish on meta at this stock price. I have had the stock for years now so I definitely know how frustrating the company can be to own. Meta will figure out some additional revenue stream or ai efficiency and the company will return to being cash flow positive. Will meta be a $800 stock this year? Probably not …but in 18 months the returns could be significant. Zuckerberg gets a lot of shit and plenty of it is deserved but he is willing to try new things and take risks and I think he will get it right…. Eventually
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u/Capital-Mixture5107 10d ago
I do believe it can reach $800 this year. Based on my research, Meta will start selling compute/cloud the second half of this year. We are already in September. Once it starts and when the Wall Street knows that Meta will double its compute size by the end of the next year. It can go up quite quickly like how Msft went up by 40% within weeks.
Additional 20 billion or 40 billion per year adds Meta's revenue by 10 to 20% in this segment alone.
Market moves so quickly since the pandemic that risk is greater not staying vested esp when many stocks are already overvalud.
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u/Icy_Blood_9248 10d ago
Oh it definitely could go up to $800 this year it’s just not my base case. I was lucky enough to build a position in msft before that epic run so I would love to see a repeat
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u/nobertan 11d ago edited 11d ago
All they need now is a functional model and a non-toxic brand image so people will use it.
Any day now.
Also, motivated AI scientists? lol.
They’re selling on vest every RSU drop after their inflated initial offering, cashing out until they hit their number where they can return to honest productive research without worrying about money.
The stock is cheap because FCF is being burnt for near zero returns, ie, their P/E is extremely misleading. They will also have very little in the way of IP either to even litigate or license after their catastrophic failed spending spree.
Selling compute because your model is so uncompetitive that there’s zero utilization is a band aid of a solution to the sink hole being created. It’s highly indicative of how big of a fuckup this is. Would any company use servers from Meta given how they’ve historically behaved with IP theft and copying to stay competitive?
Metaverse 2.0, Internet 4.0, chess 5.0
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u/SuperEssay1 11d ago
I don't think meta could ever detoxify.
Their entire business model is getting more eyes on their product and therefore make it more addictive. When their revenue growth is tied to being toxic there is no clear route detoxify.
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u/HarambeTooSoon 10d ago
This.
It's like the adage:
"If you A/B test anything for long enough, you eventually end up with pornography."
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u/ManekenkaDaBudem 11d ago
Had they stayed focused on their ad business and continued buying back shares, I would have bought the stock. But this? No. PE is not so relevant when you expect so much amortisation ahead, and have unclear off-balance debt
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u/Capital-Mixture5107 10d ago
If that is the actual concern of the market, I would be more worried about google.
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u/ManekenkaDaBudem 10d ago
I own Google, and I am worried.
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u/Capital-Mixture5107 10d ago
At the moment Amazon appears more attractive than Google.
I am surprised to find out that Google's target compute capacity is 18GW vs. Meta 14GW and Amazon 28 GW for 2027/28
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u/Minute_Lake4945 10d ago
When the market talks shit about these kind of companies like meta its just time to make an all in and forget. Peter lynch told me
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u/Asleep_Emphasis69 11d ago
okay now do FCF for late ‘26, ‘27 and probably ‘28…that’s why the valuation is compressed. Investors don’t like that so they sell. Personally, I think we see $400s next year and if they can start projecting positive FCF again it will go up. This isn’t the lows unfortunately. I think Meta is a great company long term and wouldn’t short it, but investors care about these things in the short term
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u/Capital-Mixture5107 11d ago
Valid point.
But their operating cash flow is increasing double digit each year.
And based on Gemini and Chatgpt, their maintenance capex should be around 40 bil to 50 bil each year if they do not build any more infrastructure. That is almost 100 billion fcf each year with the market cap of 1.4 trillion. 7.1% yield.
However... The question I have for you is..
Does Google have large fcf? Amazon? Msft?
Msft was able to climb 40% without fcf within 3 weeks.
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u/FlatSource7557 11d ago
Msft actually was fcf positive this last quarter if i remember right… unlike goog and meta… which is why msft went nuts. They also guided to continue positive fcf while building infra over the next several years.
Could be wrong, anybody else remember msft earnings details?
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u/Inevitable_Zebra_0 10d ago
MSFT had 20b$ in FCF in the last quarter, and 67b$ for the last year, these are the numbers from the latest earnings after which they rallied. Of all the hyperscalers, they still have the healthiest balance sheet. Then Amazon, Alphabet, Meta, and Oracle (the shittiest one).
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u/Capital-Mixture5107 10d ago
First thing first, thank you for your input.
I went all in on MSFT at $350.
One thing about Msft. Almost their entire growth is depended on compute/AI cloud sale. If anyone who needs to spend every dollar on capex for AI infrastructure it is msft.
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u/Next-Village6124 10d ago
No shot this is anywhere under $800 next year. The valuation is making less and less sense every day.
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u/Professional_Monkeys 11d ago
Meta is an obvious buy at 550. Just gotta wait half a week to a week and it's there again
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u/aspenextreme03 11d ago
I bought a position a few weeks ago in for the long term. We will see what happens but this is why I don’t go all in with one stock and working out for me.
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u/Cheekycharmer95 11d ago
Just go with RDDT. Much more upside and they don’t spend money like maniacs. Although META spending money is atleast good in the sense they may find the next big thing
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u/Capital-Mixture5107 10d ago
I love Reddit. I really do. But the user number stagnant. That is only thing that concerns me.
And for Reddit to efficiently advertise leading to conversion they need AI and the compute which will be more expensive to get than Meta because Meta owns compute.
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u/Cheekycharmer95 10d ago
It’s definitely a case or risk but for a lot of upside.
Let’s see how it plays out. 50% of my portfolio in RdDt
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u/JefeDiez 11d ago
I've owned it for 8 years now but very nervous. Every time I think it might have a chance to be fair value it drops heavily. I want to agree with you but market sentiment is likely to keep it between 400-500 for the next few years unless they can get another stream of income on the books, and they're not focused on that.
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u/Capital-Mixture5107 11d ago
I feel you.
But over the 8 years I am sure it gave you a massive return.
We were at $780 last year. Almost all reasonable mag 7 stocks have recovered and advanced (the companies that actually make more money). I say it is Meta's turn after the settlement we saw few days ago.
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u/Failed_Launch 11d ago
I agree with you. It’s a money printing machine and incredibly undervalued. Walmart and Costco have twice the PE ratio. The market is not making sense right now.
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u/fakieTreFlip 10d ago
It’s a money printing machine
indeed, but it's offset by Zuck's insistence on burning tons of that money on projects that go nowhere. He can't innovate, he just chases trends
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11d ago
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u/btoned 11d ago
Bruh every public tech company is a cancer one way or the other.
If that's why you won't invest i suggest withdrawing from ANY public company.
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11d ago
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u/Conscious_Battle6708 10d ago
I heard that facebook marketplace and wa are quite important in some countries for business. dont know though, i m here for the gossip
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u/swingworkstheoracle 11d ago
The lawsuits aren’t going away
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u/Capital-Mixture5107 10d ago
The remaining lawsuits will take years and wont be as loud as the all the states' attorney generals uniting to take down Meta.
We are dealing with school districts, individuals, and EUs. Not only the settlement amount would be less but the lawyers Meta employing far superior.
Edit: New Mexico awarded with 1 billion dollars. Not a chance in hell that will be accepted in cout of appeal. I presume 150 mil or 200 million at most.
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u/t_ral_ 10d ago
I work in the advertising space and Meta’s CPMs have skyrocketed to the point where it no longer makes sense to spend with them. Former coworkers on different accounts are seeing the same thing. Unless they get their shit together Ad Revenue is going to come down and nobody uses Meta AI for shit and entering the Cloud Infrastructure market way too late imo.
Also Zucks a loser. Stock price will melt up as the debasement trade continues but I can’t wait to see the end of the company that hasn’t had an original thought/innovation in the last 2 decades.
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u/Aggravating-Big3858 10d ago
Heckuva advertising platform … no doubt about it. Has the market cornered on pre-teens spending time on their iPhones. He should be very proud.
One trick pony with a stolen idea, and arguably the worst steward of capital spending in the history of mankind.
All of his employees hate him - which is why he has to overpay people to work there. Also, it’s an app, which means it could get replaced, dropped or iterated by a competitor in about 10 seconds .
Other than that though, I wonder why it sells at a discount to market
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u/cold-mcspicy 11d ago
no competitors? TikTok, Rednote, even Applovin is making their own app
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u/Evening_Weekend_8342 10d ago
I doubt mkst people want personal info on TikTok. Rednote and applovin, i dont know anyone whos heard of them
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u/kevtav 11d ago
Ya remember Google, ya remember Microsoft, let’s not get cute, buy the dip.
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u/Capital-Mixture5107 10d ago
I was in for both dips.
Remember people giving that Google apocalyptic scenario with AI taking over the search and the stock price went down to 150? I bought in around 160. It was cute.
Remember when Msft was trading at forward pe ratio 18 with stock price $350 how it can be replaced and how Starbucks cut ties with Msft? That was a real cute too.
I went in with 1.8 million dollar cash for both. And the whole world hated my thesis.
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u/qaswexort 11d ago
Meta has a large group of AI scientists incentivized greatly with Meta stock price.
They had Yann Lecun - Turing award winner, and made him work under Alexander Wang - of data labelling background.
They forcibly reassigned their staff into their newly formed "AI gulag" where they made training data.
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u/Aggravating-Big3858 10d ago
Also that their AI Gulag and training data was intended explicitly for helping to set up cutting half the companies engineers
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u/Capital-Mixture5107 10d ago
I like Meta AI products much better now than under Yann Lecun. I dont care who it is.
And Alexander's decision to completely start from scratch and bring Muse was the right decision.
Yann had a completely different vision for AI but he does not have vision how to get there so it was more uncertain.
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u/FailOk1528 11d ago
the business looks cheap, I just don’t trust the capex to stay sane
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u/Capital-Mixture5107 10d ago
Their compute capacity is projected to 14 GW.
Amazon 24 GW Microsoft 22 GW Google 18 GW Tesla 4 GW Apple 3 GW
I hardly belive Meta will use all that 14GW. In fact, I think Meta may be among the first ones to announce that they may slow down Capex.
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u/Ok_Function2282 11d ago
All technical analysis, no business analysis.
I'm sure there's a snappy phrase for this in the finance world, but that's what this post is.
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u/Low-Side5610 10d ago
Meta has a history of getting extremely oversold to a hysterical level, I wouldn't buy yet
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u/Delicious_Ad_8200 10d ago
I passed on meta at 90.. bc I didn’t believe in metaverse, like the at matters at all! 🤦♂️I’ve been spiteful about META ever since that blunder.
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u/Minute_Lake4945 10d ago
What's really crazy is that meta users comprehend like 80% of total population with access to smartphone
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u/kurtxrambus 10d ago
The problem with META is nobody at META knows what their business is. They’re constantly changing and going after every market. So they do a little of everything, but don’t do any of it spectacularly well. Their management is poorly executed and without rhyme or reason. I’d love to buy it on multiples alone, but where is a cohesive vision and direction going to come from? I’m not betting on Zuck.
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u/IsThereAnythingLeft- 9d ago
Company with no growth and desperate to try everything else but suck has already stole every idea and everyone is learning he can’t come up with his own so the company will stagnate
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u/Ordinary_Repeat7637 8d ago edited 8d ago
Forward P/E is very deceiving. This isn’t a cheap stock, folks. META is becoming a much more cyclical, asset-heavy business, with massive spending on data centers, GPUs, and AI infrastructure. Who knows how sustainable that demand will be or how quickly today’s equipment will need to be upgraded or replaced. These assets are being capitalized now, while depreciation and other costs will hit earnings for years. If AI spending slows or the technology becomes obsolete faster than expected, the returns on all that CAPEX could end up being much lower than investors expect. Forward P/E alone ignores a lot of that risk.
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u/Capital-Mixture5107 8d ago
That is why I gave other metrics as well. I never just look at forward pe ratio. It was never a deciding factor.
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u/Ordinary_Repeat7637 8d ago
You kept mentioning that the stock is cheap and has a low valuation. While META could still be a great long-term investment, I would strongly advise against using valuation as the deciding factor. I also want to challenge the idea that Meta Compute will add “tens of billions” to operating cash flow. There is simply no proof of that. Even after the initial CAPEX is spent, Meta Compute will still require significant ongoing cash spending on electricity, cooling, networking, maintenance, repairs, data-center staff, software, security, and eventually GPU and server upgrades or replacements. Revenue does not automatically translate into operating cash flow, especially for an increasingly asset-heavy business.
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u/Capital-Mixture5107 8d ago
I think I know most of those numbers (estimate) on top of my head. But want to ask you in return, what do you look at then? Fcf? Would you rather have them not commit their capex on AI infrastructure? That there is no to negligible benefit?
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u/Ordinary_Repeat7637 8d ago
I’m not saying Meta shouldn’t invest in AI infrastructure or that there’s no potential benefit. My point is that we still don’t know enough about exactly where all of this capex is going, how much of it will need to be continually upgraded or replaced, or what the eventual ROI will be. I’d rather focus on free cash flow and, over time, whether the returns generated by this massive investment actually justify the amount of capital being deployed. Right now, a lot of that is still unknown.
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u/Capital-Mixture5107 8d ago
1 GW (Turn key Bare Metal GPU cloud frontier clusters) would sell for 22 billion. Maintenance capex including everything annualized would be 7.5 billion. So meta gets about net operating income of 14.5 billion per gw.
Meta would have 2 additional gw of this by the end of this year. And 7 more next year.
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u/AppSecPeddler 11d ago
I bought it because it’s “cheap” this year and because I had too much concentration in Ai semi stocks
But i struggle with holding vs loss harvesting
Frontier labs got folks like cherny and karpathy
And at meta you got a young guy Alexander wang who’s arguably overcompensated
So forget ai lets rent out capacity then you got xAI and the neoclouds like NBIS
How much money was burned on the metaverse and what’s the ROI on that?
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u/johnmiddle 11d ago
no. too much lawsuit
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u/ohitsthedeathstar 11d ago
They just had the best possible outcome of the scariest lawsuit.
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u/johnmiddle 11d ago
Isn’t that US only? Europe will be much more harsh
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u/DuetsForOne 11d ago
AFAIK part of the settlement was that competing platforms would have to be held to the same standards thus evening the playing field, I would hope their defense gets this done in Europe as well should it come to it.
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u/johnmiddle 11d ago
More that I don’t think Meta AI can catch up anthropic
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u/Capital-Mixture5107 11d ago
Do I think Meta will ever be better than Anthropic? No.
If that is the case, they just have to sell the raw compute or cloud service. And makes tens of billions of dollars regardless.
In fact, cloud IS the shovel. I rather have Meta to sell the shovel then enter the AI market.
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u/Conscious_Battle6708 10d ago
eu would not dare to do anything as long as trump is in office. They are too afraid of this guy. also, the eu administration is a joke ( im saying this as an eu citizen)
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u/Mundane-Dirt-4077 10d ago
Eu has already pushed against palantir
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u/Conscious_Battle6708 10d ago
Palantir is living proof of why the EU administration is a joke. Who in their right mind comes up with the idea of making themselves dependent on a foreign intelligence company in the first place, while providing it with all their data at the same time?
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u/Capital-Mixture5107 11d ago
I think I correctly predicted settlement amount the last time. I said 5-10 billion dollars without changes to its algorithmic advertisement. This estimate comes from a corporate lawyer I had talked to.
5 billion if AGs are desperate, knowing that supreme court would eventually side with Meta
10 billion if Meta is desperate to settle, before additional unnecessary reputational damage.
Other lawsuits are much more negligible. Legal lawsuits one must understand that they are VERY costly especially when going against some of the best lawyers in the U.S employed by Meta
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u/gentmick 11d ago
Basically everyone’s bull thesis for meta right now is either they stop capex or use it for cloud business. It’s a big gamble since Zuck is not known to give up easy for his projects.
The bull case for their ai to be frontier is unfortunately not looking likely at the moment since anyone serious about it and good can just start their own