Meta Platforms, Inc. (META)

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

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.

It's a pure ad play and ads struggle in a slowdown. He worries about its AI platform--others are better.

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

Trades around 23x PE with a strong growth rate. One in two humans interact with a Meta product everyday. An excellent place to be.

Shares are washed out from this correction.

Generally, big tech are good companies, but have lost ground recently and their valuations have been nosebleeds for a long time. Meta is basically Facebook; he can message his mother in New Zealand cheaply, but fundamentally what will it do for him? Is it a sustainable business model. It's too early to say which of these names is a buy the dip, buy you could trim or take some names off the table.

It continues its record rally today. Last night, they increased their dividend by 5%. It's the cheapest Mag 7 in PE and have delivered strong. They've bought back $44 billion of shares in the past year. Massive free cash flow. He hopes there's a stock split.

Of the Mag 7, he likes this, but it's tough to buy at currently high levels. For an options trade: sell that $650 put (almost 10% downside) into May, then collect $21.50, which is a large premium, but huge downside protection.

Their earnings growth + PE was the most reasonable last year and entering this. Earnings continue to grow and are controlling spending. Is the best of the Mag 7.

Owns it but has been totally wrong in not owning it in excess. Even after this run, it remains the cheapest Mag 7 stock at 25x forward PE and the only with good relative strength.

Meta has executed the best of the Mag 7. The market forgives them even for expanding their capex.

DeepSeek was a wake-up call that Meta is spending heavily in open-source. She expects an ROI here. Meta is an ad company and can monetize AI quickly as opposed to Google and the other Mag 7 that are questionable.

Reported after the bell top and bottom line beats and tremendous free cash flow, plus a conservative outlook. Considering the strength of this past quarter, it's fine to look past that soft outlook.