Meta: A Better Bet Than Berkshire Right Now?
💨 Meta is highlighted as a company with significantly more 'tailwind' or growth momentum compared to Berkshire Hathaway.
🏆 The company is suggested to possess 'better or equal competitive advantages' and 'good fundamentals,' making it a strong contender for investment.
📈 Investing in Meta, if acquired at an appropriate price, is presented as offering 'better expected returns' than Berkshire Hathaway currently does.
Meta’s Strong Growth vs. Valuation Concerns: Time to Buy, Hold, or Wait?
📈 Meta reported strong Q1 results with 16% YoY revenue growth to $42.3B, driven by digital advertising, and a 37% YoY EPS increase due to operational efficiency and share buybacks.
🔬 The company is heavily investing in CapEx for AI development ($60-65B projected for 2025) and its Reality Labs segment, which currently operates at a loss but holds future potential.
⚖️ Valuation analysis suggests the stock might be slightly overvalued at current levels (around $590). A more attractive entry point could be around $450-$480, aligning with a moderate DCF valuation and offering better potential returns.
Meta’s Rebound: How Zuckerberg’s Efficiency Drive Turned Crisis Into Opportunity
📉 Despite a 60-70% stock drop due to Apple's ATT policy and heavy metaverse spending concerns, Meta's core advertising business, encompassing Facebook, Instagram, and WhatsApp, remained fundamentally strong and highly popular.
🛠️ Mark Zuckerberg's declared "year of efficiency" in 2023 successfully refocused the company on cost reduction and improving margins, leading to an immediate 10-percentage-point rise in operating margin.
📈 Strategic share buybacks, amounting to approximately 9% of its own shares during the downturn, coupled with improved financial performance, caused Meta's stock to soar in 2023, effectively doubling from its lows.
Meta’s Profits Soar, But Is Skyrocketing Spending A Red Flag?
📈 Meta reported strong revenue growth of 16% year-over-year, reaching over $42 billion, with net profit surging 35% due to effective cost controls.
⚠️ Capital expenditures nearly doubled, raising concerns about future profitability as these investments in servers and infrastructure grow much faster than revenues.
⚖️ The company trades at 21-23 times earnings, a valuation comparable to the 10-year U.S. Treasury bond, while also facing an ongoing antitrust lawsuit seeking a significant financial settlement.
Meta at Resistance: Strong Results Meet Technical Hurdles
📊 Meta recently presented its balance, which was reportedly good, especially concerning its advertising business.
🚧 The stock is currently at a resistance zone, and technical divergences are present, suggesting potential for a pullback or consolidation.
🛡️ For those holding the stock, the speaker advises adjusting stop-loss orders due to the technical uncertainties at this resistance level.
Meta’s Earnings Normal, Stock Climbs Towards Resistance
📊 Meta Platforms reported earnings that were considered within the normal range, without major surprises.
📈 Despite the 'normal' results, the stock price experienced a notable increase, rising by approximately 6%.
⚠️ The stock is approaching technical resistance zones, suggesting potential headwinds for further upward movement in the near term.
