Tom Shaughnessy
Founding Partner at Delphi Ventures, Co-Founder of Delphi Digital
Open models can give businesses cheaper intelligence and control over their data and IP, reducing dependence on a handful of frontier labs. That case makes Meta attractive alongside other open-model companies, though independent testing and safeguards against concrete harms remain necessary. x.com
Meta's advertising is less vulnerable to AI agents and LLMs because users must scroll Instagram themselves. AI may even give them more time to do so, while Meta retains other mega-caps' AI tailwinds; it remains the best AI stock. CapEx is still a problem. As @diyinvestor1 noted, Meta also has no exposure to OpenAI or Anthropic. x.com x.com x.com
Meta's data edge and poaching of top talent support its in-house AI development against rivals buying projects to integrate. Only Google matches its data; Anthropic and OpenAI cannot really compete without funding. Meta is taking some of Google's ad share, which should reduce Google's free cash flow. x.com
Meta's equity offering points to funding pressure as capital is insufficient for all the companies seeking it. Its size was $5 billion off the earlier $100 billion prediction, and it was announced the day of Anthropic's S-1. More equity offerings are expected from companies other than Anthropic and OpenAI. x.com
Cloud providers face a higher risk that AI labs will not meet their compute commitments as models commoditize. Labs have committed hundreds of billions in spending, which only works if the industry consolidates around them; instead, more companies keep entering the race. Meta, absent a year ago, is now ahead of Google. That is bad for the AI trade, while CoreWeave and Oracle credit spreads are widening. x.com
Meta's AI infrastructure financing raises the risk that a long wait for revenue and profit will keep its shares volatile. It disclosed plans to raise up to $95 billion. @amitisinvesting warns that further dilution could keep the stock stuck even if the buildout eventually pays off. Meta's selloff is still a massive buying opportunity. x.com x.com x.com
Efforts to penalize Meta make its shares unattractive to own. Vmaxpax raised possible further legal exposure if allegations in the Arizona case that Zuckerberg and Sandberg lied prove true; that could mean death by a thousand paper cuts. x.com x.com
Meta's billions of users, distribution and integrated ecosystem could let its increasingly capable AI models reach extraordinary scale. Muse Wonder and Muse Wonder Full bring memory, focus and task execution, though Meta's reported model results still need independent validation. Meta is one of the highest-conviction stocks: as a megacap its upside may be less explosive than smaller names, but its risk/reward looks more favorable with potentially less downside in this environment. x.com
Meta's financial strength gives it an advantage in securing scarce capital for AI infrastructure, with funding going to those trusted to earn the best returns. Meta says its planned $60B at-the-market equity program is not expected to begin until Q1 2027 and complements $35B in underwritten offerings; its Aa3/AA- ratings allow efficient long-term borrowing. x.com
Meta's hundreds-of-gigawatts compute ambition looks hard to justify against the revenue a much smaller build might support. If Anthropic can generate over $70B in annualized revenue on 3GW or less, including training, hundreds of gigawatts is not a serious figure. Earlier Muse monetization than in past product cycles also makes little sense without direct integration into ad recommendations or an immediate shift in user behavior. x.com
Meta looks undervalued against Anthropic and OpenAI given its revenue, profit margin and state-of-the-art AI model. The two labs reportedly have $150 billion in combined ARR and a $3.5 trillion combined valuation, while Meta has $228 billion in trailing revenue, a 30% profit margin and a $1.9 trillion valuation. x.com
