META

Meta can continue increasing its scale and competitive position. The advertising business converts an enormous user base into operating earnings at high margin, and that engine is what makes the rest of the story affordable.

Advertising revenue decomposes into impressions delivered and price per impression. AI-driven ranking and targeting has been lifting the second of those, which is a measurable mechanism rather than a narrative.

The market has punished the stock partly because management has been unclear about exactly how its large compute buildout will be monetized. That criticism is fair. The capital being committed is large and the return path has not been specified.

The view taken here is that compute is becoming such an important resource that the infrastructure will prove valuable over time, even where the specific product route is currently undefined. The risk in holding that view is obvious. It argues from scarcity rather than from a demonstrated revenue line, and if monetization stays vague while depreciation accumulates, margins compress before any benefit appears.

The valuation has been attractive relative to the quality of the business, which is the entry argument.

Sizing stays controlled regardless, because the portfolio already has substantial mega-cap technology and compute exposure. Meta, Alphabet and Amazon share sensitivity to the same AI capex cycle, so treating them as three independent positions would understate the concentration actually being run.