Market cap : 1.4 trillion dollars
Forward pe ratio : 17
Operating cash flow 2006 expected : 140 billion dollars
Revenue growth 2026 expected : 28%
User base : 45% of global population
3 risks
1. High capex
\- Turns into assets that can generate more profit via advertisement and cloud so no comment on this.
2. Lawsuit
\- The state attorney even admits that 1.4 trillion dollars was to catch the general population's attention on this matter. And they state that they pursue 200 billion dollars.
\- Improbable. This number represents an aggregated theoretical statutory ceiling rather than a realistic legal outcome.
\- It will be more like 5 to 10 billion dollars even then the court ruling would be dragged into years and years.
3. Macro environment
\- I truly believe this is the only real risk and it is risk that currently all stocks carry (except energy of course). Iranian war with high oil price and depleted SPR around the world may lead to energy crisis which in turn lead to higher inflation which in turn lead to higher rate which in return reduce the multiple of stocks..
Meta's massive comeback...
Low valuation
\- We are starting with low valuation whether you measure it with per or cash flow.
Competitive AI products
\- Meta's AI products are not the best but they are good enough and most importantly "affordable"
\- I notice Meta is constantly producing AI products at "affordable" pricing.
Meta Compute
\- Meta selling raw compute can generate enough revenue (10 to 20 billion per year) that can pay off capex or even any future lawsuit settlement.
Eventual stock split at $1000 or even at $800..
This stock currently has upside of 50% to 80%.
Mark Zuckerberg will lose his AI talents if the stock continues to do poorly which will make him nervous. He himself also of course has the majority of his wealth tied to Meta.
I put $1,000,000 at the moment. Cost average around $555. Another $1,000,000 to go.
One of the few companies who can actually afford high capex of building AI infrastructure. Not like Tesla, SpaceX or Oracle which keeps diluting and offering bonds to invest.
Edit: I ended up investing the full amount of $2,000,000. Gained 20% and substantially reduced the holding to 500k. My goal is to eventually reduce to $100,000 and diversify my investment like a normal functioning human being or just invest in S&P500.
My short article is only intended to spark interest for people.
I hope to write the next article on Synopsys which I believe is the next stock to go up 20 to 40%. It plays essential role in our AI era.
Good luck on your investment.