Meta

Thesis

• The business: an attention auction, a global advertising network wrapped around four free communication apps.
• Moat: owned distribution (zero TAC), first-party behavioral signal, and auction depth (advertiser scale).
• Earnings drivers: ad impressions, ad pricing, cost of compute. Reality Lab a cost center and option. NOT user growth.
• Operating cost drivers: D&A. Share-based compensation. Third-party AI token costs
• Competitors: Google (search and entertainment intent), Amazon (purchase intent), Meta (social and entertainment intent).
• Risks: Teen-usage remedies impact on signal and profit. Fixed depreciation. Off-balance-sheet obligations.
• Downside case: advertising slowdown while depreciation steps up.
• To watch: depreciation catching up to capex, ad pricing, engagement impact of the August 2026 teen-usage remedies.
• Questions: AI-driven performance and efficiency gains?

Reports

• META Coverage File
• Meta Platforms — Bull & Bear Memo
• Meta Platforms — Story Explorer
• Meta Platforms Business Overview
• Meta Platforms Business Overview (PDF)