Meta Platforms, Inc. (META)

It makes sense for someone to trim their holdings, after the strong move Meta has had. Meta is in better shape than at its peak, because at that time the company didn't realize that all their attention shouldn't have been on the metaverse and they had hired too many employees. Cost cutting and monetizing Instagram and Whatsapp are all good moves. Trades at a reasonable PE still.

She took profits after Meta swelled to 8% of her portfolio to control risk. A year ago, Meta was trading at 11x forward PE, but that's now 21x. That's a big re-rating. A lot of the good news is baked into the share price now. She still owns a lot of shares. Digital ads rose 4% YOY last quarter. It's prudent to take profits; never wrong to take profits.

It saw an upgrade today. Quality has always been there, momentum has returned to the stock, and management is executing on the activist's playback (cost efficiency with little talk of the metaverse, thankfully). With Apple introducing their VR headset, how will Meta compete and spend on that? Will that add to earnings?

It saw an upgrade today. Last year, it traded at 11x forward PE, and now it's at 21x. Quite a jump. Yes, we got the cost-cutting, so now the story is about revenues. In the second half of the year there could be double-digit growth. She likes the Facebook brand, and Reels is monetizing nicely and could rise further. She trimmed her position last week to be prudent.

Does not currently own shares.
Worried about future of company with Metaverse distraction.
Hard to predict future of business.
More reliable investment options out there.
Better options for A.I. exposure. 

Apple's product presentation today was far better than anything he's seen by Meta. 

It is one of five or six stocks that are driving the sector. It is up 44% on a one year basis and is maybe overbought. You could start trimming and sell half now. Don't buy today because there is resistance at this level. It is part of the long term AI trend. The technical growth space is very cheap now on a price to sales basis. We could be in a brand new bull market.

#2 holding in portfolio. 
Excellent business with good long term prospects.
Asset light, low capital requirements, high margins/return on equity.
$3.8 billion active monthly users (massive).
Revenues per user is $50 per year (North America).
Strategy shifting towards increased revenue per user (only so many people on planet).
Very difficult to replicate network effect.
Expenditures on metaverse not a concern.

He missed some tech stocks like MSFT and Meta--both can keep going with efficiencies, good balance sheets, cash flow and safety.

He just bought it. Is impressed by its momentum and growth. The issue of the past are in the past. He sold this in January 2022 to lighten up on big tech and has just bought back several tech stocks, including this.

There's room to run. Instagram has held in. Perhaps Reels is seeing momentum and maybe digital ads are rising. If these happen, then expect some (not huge) revenue acceleration which will move shares higher.

She trimmed twice recently. A lot of the upside has already been priced in, since last October's bottom. That said, she thinks they've learned their lesson about spending so much on the metaverse, and they are actively cutting costs instead. 

Recently trimmed her holding to a small position. Meta has made a huge moves in the past 6 months, so it taking profits and will wait patiently.

If/when the economy slows, the big money won't leave the table but shift to other sectors, particularly big tech. Tech tends to outperform in a normal slowdown without much inflation--any tech involving AI and tech replacing expensive workers with cheaper software to raise efficiency. Meta is one example. Once despised, Meta has momentum ever since laying off many of its workers--Zuckerberg was the first to aggressively trim the workforce and forecast an economic slowdown ahead. Meta costs are going down as its sales go up. Instagram, for example, is up 300 basis points. Meta shares seem unstoppable. When SVB collapsed, tech stocks rallied, especially those with an AI kicker.

#2 stock in Q1, up 76%, roaring ever since the CEO started cutting costs, meaning laying off nearly 25% of the workforce recently. Also, its Reels have boosted the stock and is competing with TikTok. Up to 21x earnings, but that's okay because the CEO is cutting costs and that could reignite earnings growth.