Jason Del Vicario Meta Platforms Inc / Facebook META-Q COMMENT Sep 18, 2017

He likes Meta here, is fairly priced, despite the overall selling in tech in recent weeks. 

The stock has made a bit of a 'round trip' from its recent highs but considering its strength, market share, financial position and growth, at 23X earnings (with $77B cash) we think it is buyable for investors who can look beyond the current market volatility (which will end, one day). 
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It's a pure ad play and ads struggle in a slowdown. He worries about its AI platform--others are better.

It appears to have little exposure to tariffs, because they sell advertising, but this could be a target of EU tariff retaliation or if the trade war leads to recession. Is -30% from highs, and these fears are baked into the stock. Trades under only 20x PE.

They report Wednesday. Many are worried about their ad business, but he isn't.

They reported a strong quarter after the bell: 37% YOY EPS growth and 19% YOY revenue growth. Q1 revenues beat as ad sales did not disappointment. Q2 guidance was in-line, and they raised their capex (which will benefit Nvidia).

META has a dominant market position in social media, its monthly active users exceeds 3 billion, and it is investing in AI. It is a cash flow machine, generating $52B in free cash flow over the past 12 months, it has grown sales by 19% over the past 12 months, and earnings growth is 47% over the past 12 months. It is currently priced at 23.7X forward earnings, which for a company rapidly growing sales and earnings, we feel is fairly cheap, although it can be cyclical depending on enterprise ad budgets.
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He has been buying tech during this dip, in April particularly. We will eventually exit this volatility and find stability and confidence in the market again. Meta and Microsoft are some of his key holdings, and they affirmed their capex guidance--they are spending to make incredible investments over the next three years, because they know AI is the biggest super-cycle every in technology. There is incredible pent-up demand for AI from businesses and consumers. The CEO of MSFT reported that his company processed 50 trillion tokens last month alone, or 3.5 million years of AI conversation. 

He would not buy as a value investor since the valuation is reasonably full, unless AI gives them a big edge. It has executed very well and is a cash flow machine. The main source of income is advertising and ad spending tends to go down in an economic slowdown.

Still owns it. The market liked what Meta said on the ad front, where clients can create their own ads with tools that Meta supplies--a game changer.