Meta's AI Strategy Is Misunderstood By The Market

Bruno Montoya Amador 301 Followers Follow Summary Meta is rated a Strong Buy, driven by a robust ad business, high margins, and a defensible moat. META's hyperscaling capex is justified by clear ROI in ad engagement and recommendation models, with ARPP up 24% and revenue up 27% in Q2 2026. AI investments, including LLMs and recommendation models, are materially improving engagement and monetization, despite Meta lagging in the LLM/cloud race. Regulatory risk remains significant, with a recent $17.7B child safety settlement and potential engagement limits for underage users posing a downside to ARPP and CPM. Kira-Yan/iStock Editorial via Getty Images Introduction My business partner and I have been watching Meta ( META ) for some time now after posting several promising results and having an incredible ads business. With high margins, great growth, and an impressive moat, we believe This article was written by Bruno Montoya Amador 301 Followers Follow I am a full-time equity analyst and the co-founder of Mina Vista Capital Management, a hedge fund that my business partner, William Hazen, and I started. I look for long-term investment opportunities with a focus on fundamentals. I’ve done extensive research on industries such as SaaS, technology, semiconductors, luxury, and like to analyze new theses that emerge. I find discussions with other analysts, especially when we hold opposing views, very constructive to both of our theses. If you have a different view on any of the companies I cover, send me a message on X and my business partner and I will be happy to discuss. Analyst’s Disclosure: I/we have a beneficial long position in the shares of META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.