Meta Platforms, Inc. (META-Q)

Ultimately, you have to look at who can turn a profit on AI? This one can, same as MSFT can roll out its offerings as a service to existing customers for an extra fee. Has such a variety of platforms to be able to do this on. Along with GOOG, "owns" mobile advertising, which has proven to be one of the most productive forms of advertising. So that will be a targeted area for growth. Yield is 0.3%.

A cheaper name in the Mag 7 group with more growth potential. Better growth and ancillary assets than, say, AAPL. Will benefit from AI. Getting all this for the market multiple. 

One of his 4 (AMZN, META, GOOG, and MSFT) main holdings in the technology space.

Good company, at the forefront of technology. Not expensive at 24x earnings, with 21-22% EPS growth rate. Though he doesn't own it, fundamentals looks pretty solid; great technical chart with higher highs and higher lows. He owns other names like AMZN, GOOG, and MSFT.

Waiting to see results shake out. MSFT is mission-critical for households and businesses. Longer operating history than META, so this provides a stronger, competitive moat; generates more cash. MSFT came into regulatory crosshairs 25 years ago, emerged unscathed and stronger. Both are great companies, but MSFT is better.

META drawing ire of politicians, which is an unpriced risk he's steering clear of.

Reports next week. He has a pretty full position at about 7%. He'd even start a position here around $571, and add around the lower $550 range, and $525. Very good support around $520. His 12-month price target is $645. Thinks it has the biggest database of all the players out there. That's why it buys about $38-39B worth of NVDA chips, to process all that data. 

Its natural processing language model, Llama, will sell the processing of its (and others') data to software companies such as NOW and CRM. That's how it's going to monetize all that data. Thinks this stage will happen in 2025.

Now have to look at who's going to interpret the data within the data centres. One of the 2 companies with the most data (the other being GOOG). Doing a lot of work in model training. Yield is 0.4%.

About 50% YTD growth, yet still trades at 22x forward PE and 19x forward PE on 2026. Fair value.

Also in his top 5. 12-month price target of $577, so still $100 left on the runway. Stock's not cheap; trading at 22x next year's free cashflow, which is actually pretty attractive for the space it's in. Strong free cashflow margins, great balance sheet.

Investing is really hard. He sold shares when Zuckerberg was throwing money at the metaverse. But the core business is so good, doesn't matter how bad the money spend is. Kids (and not only kids) today are completely addicted to reels, Instagram, etc. Pickup in economy means pickup in ad revenues. Doubling down on Ray-Ban glasses.

Valuation not that expensive for the quality of the business. If there's a nasty pullback, he'll be looking to buy back in.

12-month price target of $526. Buy in thirds here around $470, $445, and $420.

Good company. Typically over the summer, you see tech underperform for a while. Seasonals are just a tendency, not an absolute. Trendline since October 2022, now testing it. If you own, hold. Could be an opportunity to buy, but he's not buying yet, as it may waffle a bit during summer.

Priced to perfection. Stock came down from expectations, an entry point. Chance to buy one of the better names. Using AI to generate significantly more ad revenue. Could see a scenario where stock moves above all-time highs, proof will be in the pudding. Still needs good earnings, and will need to be careful of spending. Have to spend money to make money, and he feels they'll do well. Yield is 0.4%.

Very strong business that is benefiting from many secular trends. Would expect growth to continue. Share price fairly valued, and would recommend buying. Excellent leadership with strong array of products. Very high margin business. Good for long term investors. 

Broad market driver now is AI. To benefit from, and optimize, AI, you need data. Only the Mag 7 have massive data. Both are plays on digital advertising. 

He's chosen GOOG, as it's a bit more essential than META. Both have a fairly reasonable valuation, though META is a bit more of a value play right now. To buy GOOG, wait for pullback.

Research shows that you can have just a few, but very successful, positions that carry a large part of your portfolio. You want to be on the lookout for big, multi-year gains in your portfolio. When you find a META, and it's still working, stick with it (unless it's become an uncomfortably large portion of your portfolio). Great company. See Top Picks.

Originally sold on its clouded future, Metaverse was enigmatic. Recently repurchased. Balance sheet and expenses  under control. Ad market took off post-Covid. Yield is 0.41%.

Lesson: As an investor, don't be afraid to go back. Swallow your pride and look at a company for what it is today, not what it was. Ask whether it's a good investment for your portfolio today.