Hari Ramachandra

Meta's share price has fallen 20% from its peak, but the business remains strong. It is one of the two best advertising machines, forecasted to surpass Google in ad revenue by 2026 ($243B). Operating margin 41%, $46B FCF in 2025, 18.5% revenue CAGR. The market fears $135B AI capex, but Meta has distribution scale (3B+ users) and a walled garden of data. As AI models commoditize, distribution and proprietary data become key advantages. AI can improve ad targeting and existing products without needing immediate subscription revenue. Even without AI monetization, base case implies 46% upside; AI success offers more.

Moody's operates as a duopoly (with S&P) controlling 80% of the credit rating market, boasting 51% operating margins. The stock is down ~22% YTD due to fears that AI will disrupt its analytics business (40% of revenue). The core ratings business (60% of revenue) is a regulatory "toll bridge" that is legally mandated and unlikely to be disrupted by AI. The sell-off provides a rare entry point into a high-quality compounder, even if the P/E remains elevated at ~34x. LONG (Quality Compounder). Valuation compression (trading at 34x P/E); regulatory changes; cyclical downturn in bond issuance volumes; AI successfully eroding the analytics moat.