Meta Platforms, Inc. (META)

Meta's drop this week shows there are consequences for overspending in AI capex without a coherent strategy. Has fallen 24% and up only 3.4% this year. Reels, for example, shows that Meta does a great job of incorporating AI into their products and using AI to help their suggestion engine, which leads to revenues. But there have been 5 restructurings of their AI team this year and are buying small companies to gain AI talent. It's healthy for investors to question the AI spend by companies.

Isn't selling his shares during this 24% pullback. Post-earnings, the market sold Meta first and asked questions later. Meta is up only 3.4% for the year. He would add shares in more weakness.

Poster child for negative reaction to AI spending and the productivity of that spending. Implements AI through existing platforms, which drives advertisers to those sites. Can demonstrate to advertisers how productivity will improve. Ad and revenue numbers are good, yet only trades at 20x forward PE. He added on recent weakness.

Last week beat on top and bottom, growth rates were great, margins were higher, raised guidance. Street wasn't disappointed, the problem was it announced $15.6B tax bill. That's a lot of money, and they should have pre-announced it. His 12-month price target is $805, and used recent weakness to add.

So many horses in the race. Probably one of the more robust machine-learning capabilities out there. Buy here, another third ~$600, and the final third ~$575.

When they reported a strong quarter last week, shares were hammered, perhaps because they raise their capex dramatically, from $66-72 billion to $70-72 billion while total expenses will grow "significantly" faster. Shares plunged 15% in one week. This is unfair, because peers including Alphabet and Microsoft are also spending a lot on AI. He believes that the market is flashing back to the CEO's expensive Metaverse overspending a few years ago. Also, Amazon and Alphabet did a better job in explaining why they are spending more.

Attracted by the recent selloff -- mostly a one-time tax payment hitting cashflow, but doesn't change the big story. Sees it continuing to be the leader in the space. Continues to deliver strong revenue gains, up 26% YOY in Q3. Reaches a massive audience, which remains unmatched in scale. Short-form videos keep driving momentum, with better monetization every quarter.

Going all-in on AI. It'll provide smarter ads with deeper engagement, and investment is rising. Fundamentals: 9/10, with ~27% upside from here. Yield is 0.32%.

Shares have fallen over 100 points since the CEO said he will spend whatever it takes on data centres. Wall Street is concerned over this spending on AI. Zuckerberg is right, and the stock is a buy after this pullback. Don't bet against Zuckerberg who has a great track record. Meta could lose its dominance if it doesn't keep spending and innovating.

Don't be scared by big numbers, he'd still put money in today. If the earnings are a big number, and the price is a big number, then it's just a number. You just want to make sure you're not paying 200x earnings. This name trades somewhere in the mid-20s.

One of the laggards in big tech. One of the quality names that will start to catch up again and the multiple expand. Positive momentum in its business means you don't have to worry about it. Should do well in next 12 months.

Social media giant. One of the mega-caps that's not that expensive. Sees ad demand continuing to grow. Using AI to target ads, which enhances ad performance. Personalizing content to users, which improves user engagement. Technology is very scalable. Expected earnings growth of over 17%, cashflow continues to be very strong. 

Hasn't monetized WhatsApp yet. VR hasn't been a big winner yet, but could be the future. AI is very important to a name like this. Yield is 0.29%.

Doing very well on advertising. Spending lots on AI, and we'll have to wait and see the return on investment from that. It is showing dividends initially from AI on its advertising platform. Should do well over a 3-5 year horizon.

Some of tech outside semiconductors and AI is starting to pause and consolidate. Seeing that a bit here. Finding some resistance ~$800, yet the long-term uptrend remains intact. So far, looks like a normal consolidation within that long-term uptrend. A nice step-pattern stock.

Wonderful runway long term. Poised to take share and do extremely well in the new age of AI. Today's capex spending in the space is much more disciplined than during the dot-com era. King of social platforms -- over half the world's population uses one of their products every single day. Very profitable, growing well.

Pivoted quickly from focusing on the head-scratching Metaverse. Motto is: Buy. Nurture. Monetize.

12-month price target of $805, lots of room. This name is in the top 10 of his fund and in separate growth portfolios. He holds onto all of the 10, but just rebalances. Pendulum in tech has swung to the hardware side, capex indicates it's going to stay that way, and META's in the right place.

Bit of trivia:  Zuckerberg actually bought a small software company on Spadina Ave. in Toronto, named Meta, for the name. He had a grand vision for his company and he wanted the name.

Trades at a slightly high 27x PE. If there's a correction this fall to $600, he will take a closer look at it.