Even if Meta's AI buildout Fails it remains a good investment
u/MarginsMatters ·
Reddit — r/ValueInvesting
· August 07, 2026 at 20:32
· ⬆ 15 pts
· 💬 21 comments
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Summary
Post argues Meta remains a good investment even if its massive AI capex fails to generate returns, because the core ads business is undervalued.
Author builds a conservative 2032 scenario: 15% revenue growth, 25% margins, 25x P/E, projecting ~98% upside from ~$591.87 to ~$1172.57.
Quality assessment: Reasoned scenario analysis with clear assumptions, but relies on long-term estimates rather than hard fundamental DD; more informed speculation than rigorous deep-value research.
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I want to start off with the fact this projection assumes worst case scenario for Meta's AI spend. I think it will likely provide some new revenue streams and continue to improve core algorithm, However EVEN if it doesn't I still believe the core ads business is undervalued.
Before 2032 Meta will realize the spending isn't providing good ROIC and start cutting Capex, However even in 2032 maintenance costs will still be high and depreciation will still be hurting margins.
2032 Projection:
I modeled a conservative 15% average revenue growth (currently 28% I think).
Margins should take a considerable hit but start recovering eventually, I estimated 25%.
And a P/E of 25x is conservative IMO for a recovering company with a strong moat.
Results:
$591.87 → $1172.57
\+98% UPSIDE 11.3% CAGR
Core ad business can drive 15% revenue growth even without AI upside, with margins recovering to 25%. Market overweights AI capex risk, creating upside if ads business holds and AI spend is cut rationally. Long-term value opportunity in Meta’s core ads franchise despite AI uncertainty. AI spend stays elevated; margins compress beyond forecast; ad growth slows; regulatory/competitive pressure.
This Reddit post, published August 07, 2026,
features u/MarginsMatters
discussing META.
1 trade idea extracted by AI with direction and confidence scoring.