META "Undervalued?" Addressing Social Media Growth & A.I. Spend

Asks how Meta platforms stack up against TikTok and Pinterest in social media landscape

Diane King Hall

Landon Swan

Meta has two views: user visits and ad site visits. TikTok growing strongly at +33% YoY, Instagram +11% carrying Meta, Facebook declining -4%

Instagram driving engagement with video time spent up 30% YoY. Meta doing okay but not great, explaining recent sell-off from $750 to $610

Landon Swan

Ad spending data shows Facebook +21% YoY for ad site visits, Reddit +600% but from small base, Meta commands 40% market share vs Google's 45%

Revenue was up 26% last quarter. Investors shaken by AI spending commitment. Pinterest appears most undervalued with strong ad growth and low PE

Landon Swan

Meta with 27 PE ratio is fairly valued after sell-off, possibly undervalued given ad spend growth +21% and Instagram user growth +11%

Reddit at 87 PE has too much growth priced in. Meta has 40% market share of advertising platform visits and nearly half world population as daily active users

Notes Meta improved guidance, strong user metrics, and asks if current price discrepancy presents buying opportunity

Meta has 3.5B daily active users, improving revenue per user, and stock is $70 off 200-day moving average

Tom White

Landon Swan

Confirms Meta not struggling fundamentally, recent sell-off unjustified by data showing ad spend +21% and Instagram +11% growth

AI has already increased platform time spent by 5-10%, driving more advertising revenue. The divergence between strong fundamentals and stock price suggests undervaluation

Notes Wedbush added Meta to best ideas list with compelling risk-reward and asks about TikTok vs Instagram growth comparison as risk factor

References CapEx concerns driving stock volatility and investor sentiment shifts

Diane King Hall

Landon Swan

TikTok growing at +33% vs Instagram +11% is biggest yellow flag for Meta investors due to platform similarity

Supports Zuckerberg's AI spending strategy as front-loading for future superintelligent AI, already showing benefits. At current levels, likes Meta despite TikTok concern

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