Quick Note: Meta announced earnings and the shares are down 11% (mainly due to street analyst uncertainty around capex spending). Here are 5 quick takeaways:
1. Uncertainty causes selloffs…
…and BUYING opportunities people. Analysts asked repeatedly for capex spending expectations and got almost nothing!
2. Datacenter Capex will rise…
…and this is a good thing, NOT Bad, b/c it means growth opportunity. Per CFO Susan Li:
"on the data center side you’ll start to see sort of meaningful build activity from the new data center architecture that we had announced earlier."
3. GPUs:
Per CFO Susan Li:
"On the server side we are seeing some relaxing in the supply of GPUs"
This is good for buyers/users/Meta (less deman better prices on the GPUs Meta needs).
4. WhatsApp huge potential:
now over $1B annual revenue run rate from click through ads and paid messaging. This free app is used by so many around the world! Huge potential!
5. CEO Mark Zuckerberg has the voting rights:
He's going to keep doing what he wants and disclosing as littles as he can. This has been a recipe for success so far.
Bottom Line
Meta remains a high margin, high profit, money printing machine (thanks to massive advertising channels and revenues). And the company continues to focus aggressively on large growth opportunities (a good thing).
*Long Meta (in the Blue Harbinger Disciplined Growth Portfolio).