I have around $15k that I am ready to invest and Meta keeps coming back to the top of my list now that I am keeping away from MSFT. The business looks incredible but the stock has also had a huge run which makes me wonder if I am buying at the wrong time.
What I am struggling with is valuation. From what I've seen, Meta is still growing revenue at a healthy pace, margins are expanding again and they are throwing off an insane amount of free cash flow. Instagram, WhatsApp and Facebook are still money printing machines and AI seems to be making their ad business even stronger.
The part I am less sure is whether the current share price already reflects all of that.
Some valuation models I have looked at put intrinsic value around current trading levels while others come out 10-20% higher depending on assumptions around AI monetisation, capex normalising and long term earnings growth. If those assumptions play out, today's price could still be reasonable. If growth slows even a bit though, it starts looking much less attractive.
I don't mind holding for long term like 10 years or more, so I am not trying to time the next few months. I just don't want to be the guy who buys after everyone has already priced in the upsides.
Curious to hear both bull and bear cases from people who have done some work on Meta valuation.