Meta Platforms: Undervalued with a Clear AI Monetization Path

2 days ago

Alex

"Another stock that's trading well under its fair value is Meta Platforms. According to DCF models, Meta Stock is 23% undervalued, which means it has a 30% upside from its current price, even though it's one of the biggest money printers on the planet. Meta is selling off mainly because investors are nervous about its AI and infrastructure spending that it's gotten so big that it could hurt their near-term earnings and free cash flows, just like they did with the metaverse in 2022. In their most recent earnings call, Metaguided their 2025 capex budget up to 70 billion. That's versus around 40 billion in 2024, and they warned that their AI spending in 2026 will be even higher. Wall Street is worried that Meta Platforms won't be able to make money on their AI investments for years to come, just like Oracle. But Meta is nothing like Oracle. Meta is already monetizing AI today, mainly through better ad targeting, automated tools, and AI-driven shopping."

The speaker discusses Meta Platforms as an undervalued opportunity with an estimated 30% upside based on DCF models. Despite market concerns over high AI and capex spending, Meta is already successfully monetizing its AI capabilities, especially in advertising, which makes it a promising long-term investment.

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