Tim Travis 6.22K Followers

Summary

Meta Platforms delivered 26% revenue growth and strong ad pricing, but headline results were impacted by a $9.89B legal charge and elevated capex.

META trades at a discount to other large AI spenders, with a forward P/E of ~19.5x, and the core Family of Apps business is even cheaper when Reality Labs losses are excluded.

Substantial AI-driven ad revenue gains and early traction for the Muse assistant underpin the investment case, though heavy capex and legal liabilities weigh on free cash flow.

I rate META a Buy, expecting further upside if 2027 capex growth slows or Muse begins generating material revenue; key risks include rising expenses, litigation, and governance.

Kira-Yan/iStock Editorial via Getty Images

Meta Platforms (NASDAQ:META) had the kind of quarter that usually sends the stock up. Revenue grew 26%, ad prices rose 14%, and fourth-quarter guidance came in above what analysts expected. The stock rose as much as 5% after hours on October 21.…