Meta Buy Call Based on Undervaluation and Robust Metrics
"So to answer the question, do I think Meta Stock is a buy before earnings? Well, I think the stock is meaningfully undervalued. I calculated a fair value at $857. The current price is $735. So this is one of those stocks where if you wanted to buy before earnings, I think it makes sense. You can buy before earnings or do staggered purchases over time. This is a business where I like the long-term prospects and if I were interested, I would invest incrementally to reduce timing risk."
The speaker explicitly states a buy call for META, citing a calculated fair value of $857 versus a current price of $735. He suggests that the stock is undervalued and recommends buying it either entirely before earnings or through a staged investment strategy to manage risk, emphasizing long-term prospects.
Trade Call: Adding META on a Buy Signal
"We did all these trades Monday or Tuesday. We added a 2-3% to both our equity and sector models. We brought some positions up to where we wanted to. We added to Meta. We’ve been wanting to do that for a while and it sold off. It came on a nice buy signal so we added to it. We added to Kinder Morgan, that’s our pipeline. JP Morgan got beat up on earnings and we took advantage of that. And I believe we added a little bit to Amazon as well."
Michael Lebowitz describes a tactical rebalancing in which his team increased their exposure to stocks after a sell-off. He specifically mentions adding to Meta on the strength of a buy signal after the stock sold off, indicating a confident, trend-following approach in the near term.
Meta Platforms Demonstrates Cost Discipline Amid Aggressive AI Spending
"But with Meta Platforms, the company generates so much free cash flow, right? $49 billion in free cash flow it generated in 2024 and it's estimated to generate 57 billion in free cash flow here in 2025 even after all of that aggressive spending. So I like to point this out for investors to keep this in perspective that for many years the risk with these companies was that they were generating all this cash and they didn't know what to do with it. But now with artificial intelligence, they found that category they can invest and they expect to get a good return on that investment. In fact, I expect Meta's free cash flow to rise from 57 billion all the way up to 151 billion by 2035 or roughly triple between now and then over the decade."
The speaker highlights Meta Platforms' ability to generate robust free cash flow despite its aggressive $65 billion capital expenditures on AI expansion. He underscores the discipline in cost management by noting that even with cutting 600 AI jobs, the company remains well-positioned to invest in AI initiatives. The expectation is a significant rise in free cash flow by 2035, reinforcing the company’s efficient capital allocation strategy.
Meta Platforms: Buying the Dip with a DCF Perspective
"Stock number two is Meta. This is a company I do understand how they make money and how they can lose money. I was buying all the way down as it fell to $88 per share, and now the stock is at $730. Based on my DCF analysis, the numbers show a low price of $600, a high of $1,700, and a middle price of $1,000, representing a 13% return. If you’re buying Meta today, you’re betting on its ability to turn huge AI investments into even bigger profits."
The speaker outlines a trade idea for Meta, sharing personal experience of buying on dips and using DCF valuations to set a price range. The analysis underscores the company’s solid fundamentals, massive user base, and significant AI investments as reasons to buy.
Commentary on Meta and Value Investing
"Now, keep in mind, guys, I buy large companies. I’m not looking to buy these small little companies that require me to really understand management. I want to buy big companies that are mispriced. Think Meta in 2022. I was a buyer of Meta from 150 all the way down. Actually, I think less than 200 all the way down to $88 a share. I bought it on its lowest day. And the entire time people were saying, "You don\"t get it, Paul. Meta\"s done. Zuckerberg needs to be fired." Those are the same people who are probably buying the company today at $760 a share."
The speaker shares his personal experience with buying Meta during a significant price decline, emphasizing that value investing means purchasing quality companies when mispriced. He contrasts the irrational market hype with disciplined investing decisions, noting that buying at a low price can yield long-term benefits as fundamentals drive value.
Buy Meta if Price Falls Below 650
"Now, the first stock that I believe could do extremely well out of this pullback is Meta. Meta is down 6 and a half% on the month. Meta is just an amazing company with almost three and a half billion daily active people. I put in the current PE ratio for 2025 and I personally wouldn\'t pay much more than 23 times earnings. So, if Meta gets to 650 or below, I will likely start a position."
The speaker outlines a clear trade call on Meta. He highlights its strong fundamentals, huge user base, disciplined expenses and reinvestment strategy, and emphasizes that buying Meta at or below 650 is crucial to achieving his upside target. The commentary is supported by valuation metrics and growth expectations.
Buy Outright: Meta Platforms (META)
"Beginning with stock number one, which is going to be Meta Platforms, stock ticker META. And when it comes to these mega cap companies, Meta Platforms has kind of been losing some ground. And right now at today's valuation, I believe this is a gift. After all, when it comes to Meta Platforms, they are one of the largest digital advertisers in the world today, trailing only the likes of Alphabet. What are we entering right now? The fourth quarter, the biggest digital advertising quarter of the entire year. This is a stock that I'm buying outright and not utilizing an option strategy on."
The speaker calls Meta Platforms (META) a buying opportunity, emphasizing its strong advertising position and favorable valuation ahead of the fourth quarter, which is the peak advertising season.
Commentary: Meta Platforms Leveraging AI in Advertising
"Meta got some of the best AI minds money can buy and is now figuring out what to build. It's actually doing a good job when it comes to advertising and using AI to its advantage."
The speaker argues that Meta Platforms is effectively utilizing its AI talent to enhance its advertising capabilities, implying that its current strategy will help maintain its competitive edge.
Meta Vulnerable to H-1B Visa Policy Adjustments
"Meta employs 75,000 workers, with about 5,000 on H-1B visas, making up roughly 6.7% of its employee base, which could expose the company to risks if the new $100,000 annual H-1B fee is enforced."
The host provides a regulatory insight on Meta, noting that its higher percentage of H-1B workers could lead to cost pressures and operational risks if new visa fee policies are implemented. This commentary serves as a caution for investors considering Meta's valuation and potential regulatory headwinds.
Platform as a System of Record Enabling AI and Data Flywheel Effect
"When you become the system of record, you just get this data mode. And it means that your audit costs go down, your internal reconciliations become super efficient and, with modern AI, you can even have the platform generate detailed insights across exposures. That is so freaking powerful when you can trace the life-cycle of a security end-to-end."
Shomik highlights the strategic advantage of C-WAN becoming the core system of record for its clients. This integration not only simplifies back-office functions and compliance but also creates a data flywheel that enables AI-driven insights. By reducing operational friction and enhancing risk management, this system could drive further customer stickiness and potential cross-selling opportunities as clients grow their complexity.