Research archive for META

Many of our recommended stocks, especially in the tech space, compete against each other. But they also do a lot of business with each which we always like to hear.

Mark Zuckerberg is really going hard on artificial intelligence. Meta is spending hundreds of billions of dollars on new data centers and offering huge sign-on bonuses and pay packages to attract the best AI engineers. They are being poached from Apple, OpenAI, Anthropic, DeepMind, and GitHub.

Last week, Meta dropped quarterly results so good it had Wall Street clapping like proud parents at a school play. Shares jumped 12% to a record $779.34 after the company crushed Q2 earnings, beat every estimate in sight, and then added a cherry on top: higher sales guidance and a clear signal that it's going all-in on artificial intelligence.

Meta is going all in on AI - maybe it is time for a name change? On a Thread post yesterday, Mark Zuckerberg announced that Meta plans to spend hundreds of billions on computing power to build superintelligence. The company's free cash flow last year was just over $90 billion, which means they plan to spend all of their free cash on AI and data centres. In my book, that is better than a pile of money building up on the balance sheet doing nothing. Our GDP is around $400 billion, and Meta will spend that on developing AI over the next five years.

Having a large user base has proven to be very valuable in this day and age. Companies have found many innovative ways to monetise their users, including advertising and selling add-on services. Using the data to enhance the experience through AI is a relatively new concept, but it is making waves.

Meta is on a spending spree to stay at the forefront of AI technology. AI will arguably be bigger than the creation of the internet, so it makes sense to be a leader in the industry.

Data is the currency of the modern world. It is why the likes of Meta and Google are worth around $2 trillion dollars. Globally, politicians are debating about the best ways to regulate data collection.

I've written about some of the companies we recommend - particularly those sitting on large amounts of valuable data, that they use to build and train world-class AI technologies. It turns out that processing all that data is not easy.

Yesterday Paul wrote about the Magnificent 7 stocks and how well they have served us. A successful story often sounds easy and obvious in hindsight. But in reality it has been far from plain sailing.

Yesterday was a busy day for Meta, as they also announced a 1.1 gigawatt power deal with Constellation Energy. The tech-giant has committed to buying all the power for 20 years from one nuclear reactor. In December, Meta announced that it was seeking to sign power supply agreements for between 1 and 4 gigawatts. This deal is at the lower end of that scale.

Meta is doubling down on AI, rolling out tools by the end of next year that will allow advertisers to create and target entire ad campaigns, text, video, imagery, and all, using just a product image and a budget.

Meta's first quarter results came out last week, and they were well ahead of expectations. Revenue for the 3 months was $42.3 billion, up 16.1% year-on-year. They are taking a larger slice of the overall digital advertising pie.

Meta released a new set of smart glasses dubbed the Hypernova, a premium AR wearable set to launch by year-end at a price north of $1 000. The device will feature a monocular display in the right lens, which can be used for notifications, apps, and media beamed directly into your field of vision. The glasses will be paired with gesture controls enabled via a neural wristband.

I saw an Instagram video last week where a financial analyst compared the total amount of gold mined to the market caps of the Magnificent 7. Roughly speaking, the total value of gold ever mined is about $22 trillion and the total market cap of the Magnificent 7 is around $15 trillion.

Meta's $22 billion bet on WhatsApp is finally paying dividends. A decade after acquiring the messaging giant, Meta's non-ad revenue surged 48% year-on-year in the latest quarter, largely driven by WhatsApp business messaging, where companies pay to chat with customers.