r/stocks
META is the best pick out there now
META is undervalued at 19x fwd P/E despite strong AI-driven ad growth, high FCF, and positive catalysts like new subscription models.
- Attractive valuation with a forward P/E of 19x despite being a major AI beneficiary with robust financials.
- Strong fundamental growth driven by AI (Lattice architecture), resulting in increased user retention and a 33% rise in Family of Apps revenue.
- Massive cash generation capability with $50B TTM Free Cash Flow and potential new revenue streams from subscriptions and cloud services.
- Technical momentum is weak as the stock recently broke key support at $600, suggesting potential further downside to the low $500s.
- High capital expenditure ($75B TTM CAPEX) required to sustain AI infrastructure growth may pressure margins if ROI delays.
META is one of those names that are either really loved or really hated by people on the internet. And you don’t really see anybody in the middle.
I like META just because I see the numbers. They are a major AI beneficiary trading 21x earnings with forwarded P/E at 19x. They are also a cash machine for their size: 1.5T market cap / 125B topline / 50B FCF (and that’s TTM numbers with the 75B TTM CAPEX numbers).
And I’m not throwing “AI beneficiary” as a buzzword here.
The Lattice architecture drove the user retention to hit a 4-year high. I’ll use q1 2026 numbers as reference: instagram reel watch time grew 10% yoy/ facebook video watch time grew 9% yoy (and overall FOA ad impression grew 19% yoy)
Meta’s ad business also really gets the job done: so much so that it had a 12% increase in average price per ad yoy.
If you put ad impression growth and price growth together, FOA grew 33%. This isn’t the “dying business” kind of growth for sure.
And recent news has been nothing but good news: such as the new subscription based model is estimated to bring in a 2-3B ARR / Jensen Huang said “nobody uses AI better than META” / & other potential catalyst that I couldn’t really come up with a number yet but could really expand the multiples: new cloud computing business, data center leasing.
All of that and it’s still trading at 19x Fwd P/E. The only caveat is the momentum isn’t looking too good as the chart recently lost a major support at $600. Personally, if I see the stock capitulate to the low 500s, I’d size up heavily on it.
Holy AI generated post.
Original thoughts are few and far between around here
Yeah, original thoughts are few and far between around here.
I have high hopes for META, but I’d like it a lot more if it could hit $630 and stay above it more than an hour.
Yes you are using AI as abuzzword. See the verdict from their CFO https://digiday.com/media/not-a-big-part-of-the-work-metas-llm-bet-has-yet-to-touch-its-core-ads-business/
I feel like the narrative on Reddit around Meta is completely blown out of the water by that article. AI spend currently has no clear ROI?
Worst analysis I've seen. No mention of the capex spending or regulatory risks.
Capex is overblown because of the metaverse disaster. They will either use the compute to supercharge their own business or sell it out at a premium. They’re being punished for investing in the future and it doesn’t make a lot of sense
I bought a lot of meta . A lot a lot of meta. I’m kinda worried . But fuck it
I hid my posts and comments when I started getting hounded in non financial subreddits about how I was a boglehead and probably a Trump supporter because I was maintaining that people with a long term horizon should just continue buying index funds on the regular. How horribly Trumpy of me
Reddit as well then. Selling our answers to AI machines, how dare they.
AI slop
MSFT could be 1-2 years out still. So much negativity around loss of market to Anthropic, Google etc that may take some time to flip
They could increase revenue 50% next quarter, but if they don’t say it’s directly due to AI they’ll keep getting punished for lighting money on fire
I bought more METU today. Probably buy some calls soon too, but this week is weird.