TechStockFundamentals
Technology Investor with ~25 Years of Experience, Former Hedge Fund Manager for 10 Years
MNTN's risk-reward looks almost too good, as AI video tools let long-tail advertisers make ads good enough for connected TV, inventory that badly needs them. CTV ad quality lags Meta's by miles; HBO Max's ad tier repeats the same few ads, showing valuable inventory poorly used. MNTN focuses on the long tail, and its QuickFrame AI generator made solid video from stills where Meta's tools lack such features. Estimates look low and the stock dirt cheap, though Q1 may not impress. x.comÂ
MNTN trades at a 70% discount for a profitable connected-TV advertising category leader. After IPOing at $16, running to $32 and crashing to $8, the business still grew revenue 36% with an 82% gross margin, earned $34.5M of net profit in Q4 and holds $210M of cash with no debt. x.comÂ
Magnite's position in the ad-tech ecosystem looks to be consolidating, and the stock remains cheap, though less so at current prices than from lower levels. Per @MinotaurStocks, partnership momentum and 25-30% CTV growth position it as a potential successor to The Trade Desk on the open web, at a $2 billion market cap versus $9 billion. Risks to weigh are the CFO's departure, non-trivial insider selling and AI threats to its business outside CTV. x.comÂ
Netflix's ad tier can improve its long-run economics while the stock prices in decline. It is the second most-watched platform on US TV behind YouTube; ad-tier members pay subscriptions and generate ad revenue, with room to improve fill and pricing. Revenue growth, margins and buybacks underpin an Overweight rating and $103 target, 46% upside at the preview price. The quarter was solid, but the soft Q4 guide and ad forecast cut from $3B to ~$2.7B are setbacks the author sees as fixable. x.com … Show more
Meta Platforms is worth owning because its core business keeps growing 20-30% a year and prints a ton of cash, yet it trades at a teens forward P/E, the cheapest in the Mag 7. The discount is deserved: Metaverse and AI bets have not paid off and it lacks a cloud platform. Still, AI will keep making its ads more efficient, and an overbuilt data center could become a cloud-style offering. Alphabet and Amazon remain preferred, but at $600 and below Meta looks very attractive. x.com x.comÂ
Meta is a buy as Muse and Instinct flip sentiment from dead-money capex to a real product, which can let the multiple run. The products seem to have product-market fit and an easy interface, with usage exploding from day one beyond expectations and immediate access to 3.5 billion people. Distribution and a vertically integrated stack with its own compute let Meta price lower to build habit, a higher chance of success though no guarantee. As in Q1, the market may chop on war and rates first. … Show more
The Trade Desk's short-term upside from ChatGPT monetization is undervalued as OpenAI moves to ads. At $22, down from $139, it is priced for distress or disruption even though the business seems to be doing okay, leaving perhaps 40-50% upside back to the low $30s on mean reversion. Conviction is not high. x.com x.comÂ
Magnite has taken share from The Trade Desk and is the largest independent seller of connected-TV ad space. Walmart's ad business now runs through it, which the Street has not fully modeled, and a favorable Google ad-tech ruling would be further upside. On the chart, a five-year symmetrical triangle looks like accumulation, with the monthly TMO flipping, the DSS Bressert near a cross and a year spent inside the Ichimoku cloud. x.comÂ
Netflix has a second growth engine most people ignore, with advertising revenue doubling to $3 billion this year. Management guides 12-14% revenue growth at a 31.5% operating margin, and its content moat deepens every year it outspends everyone. x.comÂ
Meta's shutdown of its $80B metaverse project frees that capital for AI infrastructure, data centers, power and connectivity, confirming a thesis of massive optionality. Its core advertising business is a cash-flow machine with billions of users and the most dominant ad platform on the planet, so the market overreacted to spending fears. x.com x.com x.com x.comÂ
Meta is a high-quality, high-margin business growing faster than most mega caps at a reasonable ~17x forward earnings. Its underappreciated edge is distribution, since any product launched into Instagram, WhatsApp or Facebook reaches billions instantly. AI already lifts ad targeting and pricing, growth now comes from monetizing the same users, and WhatsApp business messaging is largely unpriced. The risk is $200B+ of AI investment failing to earn a return, worse if an ad downturn hits mid-spend. … Show more
