Meta Is Spending Aggressively, But It’s Growing Just As Quickly

Summary:

  • Shares of Meta continued a massive YTD streak after posting very strong Q2 results.
  • The company yet again boosted its capex spending outlook for the year and noted that depreciation and amortization costs will be elevated in FY25.
  • Still, tremendous top line growth is offsetting higher spending, as Meta not only continues to add active users, but is also growing ad pricing.
  • Even after the YTD rally, the stock trades at a reasonable ~21x P/E. I’m reiterating my buy rating with a $600 price target (~17% upside).

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J Studios

It has been a fairly bleak earnings season for the stock market, including and especially for the tech stocks that have powered this year’s sharp rally. Yet amid carnage, one of the few bright spots this quarter is Meta (


Analyst’s Disclosure: I/we have a beneficial long position in the shares of META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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