META Just Crashed… But I’m Buying More

About this video

• Video Title: META Just Crashed… But I’m Buying More
• Channel: Matthew Tang
• Speakers: Matthew
• Duration: 21:26

Overview

This video discusses why the speaker is buying more Meta (formerly Facebook) stock, despite a recent price drop. The speaker analyzes Meta's business, valuation, recent earnings, and future capital expenditure plans, particularly in AI and infrastructure. The goal is to build a bullish case for the stock.

Key takeaways

• Meta's Strong Ecosystem: Meta owns a vast ecosystem including Facebook, Instagram, WhatsApp, Messenger, and Threads, providing a large user base for ad revenue generation.
• AI and Future Investments: Meta is heavily investing in AI and augmented reality, with significant capital expenditure planned for infrastructure to support these initiatives.
• Recent Earnings and Guidance: Q3 2025 revenue grew 26% year-over-year. Guidance for Q4 2025 is $56-$59 billion, with full-year 2025 expenses estimated at $116-$118 billion and capital expenditures of $70-$72 billion.
• Stock Drop Explanation: The stock drop was primarily due to a $16 billion tax charge related to the "big beautiful bill" and higher-than-expected future capital expenditure guidance for AI buildout, not a decline in the core business.
• Valuation and Growth: Meta is trading at a 22 forward P/E ratio, which the speaker considers attractive given its 26% top-line growth, making it potentially the cheapest stock in the "Mag 7."
• Financial Health: The company has a strong balance sheet with $44 billion in cash and short-term investments, easily covering its $36 billion in current liabilities.
• Investment Thesis: The speaker sees Meta as a resilient business with strong ad revenue, optionality in AI, and a valuation buffer, making it an attractive buying opportunity despite near-term investor concerns.
• Risks: Potential risks include high capital expenditures, uncertain ROI on AI projects, advertising headwinds, competition, regulatory issues, and the challenge of forecasting future growth.