I came into this quarter wondering whether$Meta Platforms, Inc.(META)$
The earnings release on July 30 was the first thing that reset my expectations. Meta’s Q2 revenue grew 22% year over year to $47.52 billion, with operating income up 38% and diluted EPS up 38% to $7.14—evidence that efficiency efforts and mix are converting growth into profits. Two signals inside the release matter most for how I handicap the next leg: ad impressions rose 11% while price per ad rose 9%, a healthy combination that’s hard to fake, and management guided Q3 revenue to $47.5–$50.5 billion, while warning fourth-quarter growth will lap a tough comp—transparent, but still a constructive trajectory in my view. I also can’t ignore the capital engine behind all this: $9.76 billion of buybacks in the quarter, $1.33 billion returned via dividends, and free cash flow of $8.55 billion—a cash profile that gives Meta room to keep investing and still support the stock.
If the financials are the spine, the product and reach are the muscle. Family daily active people hit 3.48 billion in June, and in late September Meta disclosed that Instagram now serves 3 billion monthly users, effectively matching Facebook and WhatsApp at planetary scale. That breadth is exactly what lets the company push new experiences (Reels, AI creation tools, private-messaging commerce) into the mainstream at will. I’ve watched Reels and DMs become the growth engine inside Instagram for over a year; reaching 3 billion MAUs tells me there’s still runway to push monetization and AI-assisted creation further into that feed.
The AI layer is the third leg of my thesis. Meta is building and distributing Llama widely and, this fall, it expanded access for U.S. allies and major institutions, while partnering with hyperscalers to deploy it—an open-ish strategy designed to put Meta’s models everywhere people build. At the same time, the company launched a standalone Meta AI app (built on newer Llama) and continues to ship creation surfaces like the new Vibes AI-video feed that tie model capability directly to engagement and, eventually, ads. To me, the strategic read-through is clear: keep the model ubiquitous, then monetize where Meta already owns attention—across Instagram, Facebook, WhatsApp, and Messenger. That combination of distribution and tooling is rare.
There’s also a simple, if expensive, reason I think the AI narrative has staying power here: capex. Management narrowed 2025 capex to $66–$72 billion and flagged “another year of similarly significant” capex growth in 2026 as it scales data centers and custom silicon for AI. The near-term accounting impact (depreciation and opex) will pressure expenses, and Meta said as much. But I read those numbers as a statement of intent: if personal “superintelligence,” agentic assistants, and AI-native creation are the next decade’s user behavior, Meta plans to have the compute. For the stock, that level of investment only works if revenue—and ad performance—continue to justify it, which is why the Q2 mix (pricing + volume) and Q3 guide matter so much to me.
The social graph beyond Instagram also looks healthier than the market gives credit for. Threads has been steadily scaling; multiple trackers now put it around 400 million MAUs and rising DAUs, with recent data showing it surpassing X on iOS daily actives. I don’t underwrite Threads as a profit driver this year, but I do treat it as a strategic hedge against text-centric social—one that can absorb advertiser demand if other platforms remain volatile. That optionality, paired with click-to-message formats in WhatsApp (still a global monster), keeps me optimistic that Meta can diversify ad surfaces while it layers AI-assisted creation and commerce into private channels.
What could go wrong?
Well, the company itself highlighted EU regulatory risk around its “Less Personalized Ads” model under the DMA, warning that changes could “significantly” hit European revenue as soon as this quarter. It also flagged that 2026 expense growth will likely run above 2025 due to depreciation and headcount in priority areas. Those are real headwinds. But I balance them against the current cadence of revenue, margin, and cash generation, and the fact that Meta is openly telegraphing both the risks and the investment plan—useful signposts for how to size exposure.
Where does that leave me on the stock for the rest of the year? First, I anchor to the numbers: ad demand is broad-based, pricing is up, and management’s Q3 top-line range implies continued double-digit growth even before any holiday lift. Second, I give real weight to distribution: 3 billion-user Instagram, a resurgent Threads, and the ability to inject AI-creation and assistant features across multiple apps create a flywheel I want to own. Third, I accept the investment bill for AI infrastructure because Meta’s network effects give it one of the few realistic paths to earn a return on that spend. If regulation in Europe bites, I expect it to show up in the print and the guide—and I’ll adjust sizing—but it doesn’t, by itself, break the multi-year case.
META Weekly Chart
Finally, I always look at price in context. Meta traded a few percent below its August all-time closing high and has pulled back modestly since, which, to me, is a healthier starting point than buying a vertical spike. With cash stacking up, buybacks active, and dividends now part of the capital-return mix, I see a credible path for the stock to grind higher into year-end if Q3 lands inside the guided range and the company keeps shipping the AI surfaces it’s been previewing. That’s enough for me to stay constructive—and to keep looking for moments of doubt to add.
@MillionaireTiger @Tiger_comments @Daily_Discussion @CaptainTiger @TigerSG
Disclaimer: This is a general analysis and not financial advice. Views in this post may be biased. Always conduct your own research before making any investment decisions.
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