Brenda Vingiello, CIO, Sand Hill Global AdvisorsMeta Platforms IncMETAPARTIAL SELLMar 15, 2024

He isn't comfortable with their heavy AI spend, because it may not pay off.

She justifies their heavy capex spending on AI, because their revenue growth is 26%. She wants them to spend more. And 19x forward PE is not high.

They report after the bell. No company is using AI better than Meta. They have huge operating cash flow to build data centres. It remains profitable, projected to grow earnings 24% this quarter. Trades at 21x PE.

He will trade his excess position, but hold his core one. They prove they can use AI to their benefit.

His go-to has always been GOOG, but he likes META quite a lot. Valuation is very inexpensive. Lots of free cashflow. Investing big in AI; it and GOOG have an easier path to monetization. Can deploy AI tools easily across user base.

Their new Muse AI platform is a game-changer, especially for the enterprise.

Their products remain in consistent demand, and they just launched Muse, a personal AI platform that could attract billions of users. Meta crushed it with Muse and he bets it will have more market share than OpenAI.

In the last quarterly report they beat on numbers and showed strong revenue growth which it's not getting credit for. How to monetize AI is the big issue but it is showing that it can be productive on the AI side. They are seeing clearly the benefits of AI in their advertising business model. The market had undervalued it but it is now trading at a premium. It still can go up if they can execute well.           
Buy 72  Hold 6  Sell 1

Huge fan of it. The consumer will drive the stock, now that they released the Muse AI agent targeting consumers. He is selling covered calls on Meta. Great to see the founder mature into a 

They just launched the Muse AI agent for consumers, which is exciting, because they can directly sell products to their customers. Amazing. Had owned this a long time. Don't bet against them. They remain one of the cheapest hyperscalers and are still growing.

It hasn't had a great year (it's flat). AI development at Meta is underappreciated. Is a great stock to own. It trades at only 20x sales.

One day Google is front of the AI race with Gemini. Now, it's Meta. Next, Anthropic and openAI. What makes Meta different is the AI is purely targeting the consumer. He has a large position and may sell part of it. The CEO is the original founder, which also makes him distinct from its peers. It's near record highs.

The overhang is that, despite good numbers from their ad business and AI's impact, Meta is still spending a lot building data centres--can Meta earn good returns on all those centres? However, Muse shows they can build productive things with AI. Despite the recent rally, he'd still buy it.

It's gone from $600 to $700 in a short time and it's impressive, because they will sell excess compute.  Meta is kind of cheap.