The Intrinsic Value Podcast 对 $META 的判断变化

So, what we'll do today, um, we have a tier list prepared. We actually have two tier lists. So, for one, we will talk about um the max 7 companies as you can see here. Plus, we have some extras. So, we will talk about the Max 7s like you know, Meta, Google, Microsoft, those those sorts of companies.

>> All right, sounds good. Um, one company that I personally like a lot and I think you guys like it less um is Meta. So I think Meta will be an interesting one, especially because it's a bit harder to um to compare to the companies that we currently have higher up as A or B tier. Um because if you ask me which companies have or which companies have the biggest moat, I think Meta is not up there compared to Amazon and Google. It's a fantastic business, but compared to those, I don't think it's up there. I think if you would have asked me in 2017 if any social media business can be as dominant as Facebook or Instagram have been back then, I would have said that's almost impossible at least in the west. Then Tik Tok came, which is also a Chinese company, and suddenly it took over. And by now we know that they can coexist. Um but it also showed me there can be competition much quicker than I thought and I think by now Meta has basically only um advertising revenue. So it's still a business pretty much solely dependent on advertising revenue and I think the opportunities for leveraging AI um they certainly exist but if I compare them to Google or Amazon I don't know how they compare.

I mean we're talking about AI agents and WhatsApp for the two of you. Um you guys don't use WhatsApp. I use it a lot, but I'm also in Europe uh where I think the main market for those agents is probably India and some of the South American countries. I think they use WhatsApp in a way different way than people in Europe do and especially people in um in America do. Um so I don't know about that one. And then you just talk about you know selling excess compute could work out. I I see it as a margin of safety where you know if you buy too much compute um and currently you have more demand than supply you can do that. Um, but if we think about the next 20, 30 years, I think they will have a tough time. I I think personally, because I'm slightly biased here, no, I can't go higher than Microsoft. I think if we think about 30 years, I just can't do it. 30 years is a long time, guys.

>> Man, yeah, that's a it's a hot take, Daniel. Boy, um, there's so many things to say about Meta. Uh, for one, they've, you know, they've lost some of their shine with the whole metaverse thing and just the fact that it's called Meta and not Facebook now. Um I who knows h how much tens of billions of dollars probably more were just really completely wasted on this metaverse uh idea that you know Zuckerberg sort of bet the farm on. And um I don't know I don't think anything has come of it. I I think you know they they have these like cool uh glasses that they've partnered with Rayband with and there's like you know like headsets that you can't but the these are not common products you know never seen anybody in public uh using any any of these products and so um the metaverse feels like uh a huge um you know chip into Zuckerberg's credibility where he's done a lot of incredible things you know acquiring Instagram back in like 2013 whatever that was um was was a brilliant move.

Um so you know that that that's something we should consider in terms of the coffee can portfolio of like uh Alphabet hasn't made catastrophic mistakes. Amazon hasn't made catastrophic mistakes. Meta sort of maybe not a catastrophic mistake but they've made a really serious mistake uh with with the metaverse.

That said, um I am really optimistic about how AI will uh you know support their advertising business. Um I think it, you know, it's going to be a huge boon to to ad targeting. Um and like I said, I also think it's going to drive I think AI will drive uh more e-commerce generally. Um more e-commerce penetration as a percentage of of total commerce. Um so there's that to be said. I think that's a a potential big tailwind for for Meta.

Um, but then you also you have the question marks around um around the metaverse and Zuckerberg's uh sort of judgment on on major bets. Um, you also have the the legal and regulatory implications of um I think we can it's not that controversial to say that like Facebook and Instagram have had some very negative effects on society. Uh we've seen you know suicide and depression and anxiety rates um especially among young kids and teenagers uh you know pretty dramatically increase. uh and there's uh you know some some decent evidence uh that is um you know it's there's a real correlation there with usage of of Facebook and and Instagram and you know these these are products that are not good for people's self-esteem and and mental health um I I would say at large and that's an opinion but I I do think there is data backing that with the point being I think there's serious regulatory risk here over a 30-year timeline um you're talking about, you know, are, you know, developed countries, societies going to uh say, hey, enough is enough. You know, whether it's the accusations of election interference or uh the mental health crisis, whatever it is, you have these just accumulating crises that are associated with uh with meta. And so long-term um that's not something I would want to be um I want to be associated with. Like I could I would I would you know [snorts] I'm not a trader um but if I were going to invest in meta it would be on like a one to fiveyear time horizon but you know if I were going to hold Meta to retirement it would I wouldn't do that.

And you know the other thing is you mentioned the the compute. Um this has always been a you know like a a consumerfacing business. uh in many ways um or like you know driven by the number of users on their platform um and now they're trying to get into to selling compute um and I think it's because they've made these major investments and unlike Alphabet and Amazon where there is uh I would say you know some evidence of getting returns on all that capex spending um Meta isn't hasn't seen any any evidence of that and I think Wall Street is getting impatient with Meta. Uh and I think that's why you see, you know, Zuckerberg uh to me it seems somewhat desperate to be uh trying to sell compute and all of a sudden, you know, they're going to change their business model. They're going to, you know, be uh they're going to be they're going to go into cloud and they're going to, you know, be more B2B. Um it just it feels like a desperate move to uh to to to justify their spending when they don't really have as good of a justification for it as as some of the other uh mag seven companies.

>> Yeah, I I think you're pretty right. I mean, I might be a little bit biased here because whole business list. Meta probably gets the second most amount of money from me after Amazon just because their ad platforms on uh Instagram which is their good and though I because about not being good for society with you um I can't remember if it's the province of Quebec which is in Eastern Canada or city in Quebec they basically banned um I think ban mobile phones from being at uh at schools and I' I've heard in in my own province as well that they're thinking of doing something similar. So, you know, when you when you think about that, you know, are are some of the advertising platforms that are embedded on say Facebook or Instagram, are they going to be as powerful as as they once were? And if you have less users on there, um or if they can't use it the same way that they they used to? Who knows what happens with that advertising business? And obviously, that's that's kind of where I think that Meta has the biggest benefit. At least they did. It was just in that network effect. They just had so many users. And if you were going to advertise to, you know, kind of smaller businesses, it just made sense to to go on there. And and for me, you know, they they still get they still get uh they still get money from me. So, I don't know. In in 30 years, though, I find it pretty hard to to to have belief that that I would have too much conviction that this business will be around. But I will say, I think to your point about like the immediate future, the next 1 to 5 years, um probably going to do really really well. I would say on the whole metaverse thing, yes, it was 100% a mistake, but I also think it goes that they can make a mistake. You know, they still have that underlying business which is still carrying them forward and they're still doing, you know, a pretty good job. Their numbers pretty good. Um, and so we'll see what happens with the whole AI thing that they're they're going to now. I I kind of agree with you that piv does somewhat reek of desperation and that's not exactly um an attribute of that company that you want invested in.

>> Yeah, I I currently put Meta into the Btier primarily because Chad told me or overruled us and said it probably should be Btier. Um then Sean said Ctier. So I we might just go back here. Let's say put it between B and Ctier.

Um so that's tough but just on the premise of that's what we value all of these companies at that's where we at and I feel like probably mostly because of the um the advertising business and there's no diversification. We also had in the chat I wasn't quite sure on the number it's actually as high as 97 to 98% of revenue is simply coming from the advertising business.

So also to your point Sean when they talk about selling access compute they talked about a lot of business units in the past right now they're completely reliant on the ads business So I think it's totally fair to um go B to CT here.

For example, Meta is a stock in my portfolio. I think it could be a phenomenal trade in the next couple of years. still I would put it into B or C tier for the coffee portfolio.

so for me and video 30-year time frame I mean I got to look at our list here guys can we put it below SpaceX I think that's just harsh but otherwise we put it almost above Microsoft and Meta did we make a mistake here

or Meta where you have several different platforms that have billions of users and you can pretty safely say like they're going to find a way to monetize that for a long long time.