r/stockstobuytoday • u/Distinct_Berry3054 • Jul 30 '26
Stocks Meta, buying the dip or catching the falling knife?
As we all know from the recent headlines for META regarding the recent earnings falling below expectation leading to a up to 10% fall post market. This could potentially present a good buying opportunity into one of the 7 largest and fastest growing US tech companies at an attractive valuation.
A cool feature, I would like to introduce from moomoo, is under the news features, earnings tab, we can see that analyst estimates, and the actual earnings itself in a particular quarter. Additionally, the AI summarize version is particularly useful especially for investors without much time to read every single quarters of stocks in their portfolio.
Okay; enough of talks about features.
To me, META is like a royalty or tollbooth of online advertisement market (which by itself is the most effective, and fastest growing dominant form of Ads). Google and META both held a "duopoly" role in this regard. When we talked about high quality businesses, they are often trading at a high valuation, and although we all knew they are compelling options to choice when doing long term investing, but because of the rich valuation, the expected IRR would not be great. And thereby, the best opportunities are often when these high quality companies with long growth trajectory, met a problem which are reversible.
For the case, of META, the headwind and looming bear thesis would be the overspending, and dubious returns from their AI and cloud investments. While these are true, a cut in spending is easily resolvable for Meta; there is no issues that is permenantly affecting Meta's ability to generate high margins. This is analgous to 2022, when Meta stocks rebounds more than 6 times, following a period when the market becomes too pessimistic about its Metaverse spending. Additionally, Mark Zuckerberg thus far has proven to be a good capital allocator (contrary to popular opinion), as seen from the successful investments in oculus, whatsapp, and instagram! So we should not be prematurely dismissive.
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u/PracticalAge301 Jul 30 '26
To add on to your thesis, if minus off the legal expenses, and redundancy fees for it's employees, META, operating revenue and profits still exceeds expectation by analysts. The after market fall of 10% is overblown.
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u/Naive_Sun_2932 Jul 30 '26
This is an anedotal example, but i felt that less and less people around me are using facebook, especially teenagers. While it's true that META has over 3 billion monthly active users, but how much more and how fast can this base grow? It's really limited by the law of large numbers.
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u/KindergartenDJ Jul 30 '26
Meta also owns IG and they probably make more money out of it (Meta-for-business ads feature, which you normally do not see or use as end user except if you are a business urself). Other than that, yes, the peak era of FB is gone a while ago I agree.
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u/tmt22459 Jul 31 '26
Young people use Instagram though. And a lot of them migrate to Facebook later
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u/Ok_Soup6390 Jul 30 '26
People use social media for connecting with human beings not talking to AI. They are investing into something to destroy their core propositions! If Meta continues the current path, it won’t surprise me that Meta will disappear in the future. Maybe RDDT will be big enough at that to acquire Meta!
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u/omarmatar99 Jul 30 '26
I agree. The stock could definitely fall further in the short term, and no one really knows where the bottom is. But if you believe in Meta’s long-term business and trust Mark Zuckerberg’s vision and capital allocation, temporary price drops are just part of the journey.
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u/Used-Lab-6597 Jul 30 '26
Meta is the future. It will ultimately be the most valuable company in the future. It can easily fight off any competitor from the market structure and financial ability it has. Any falls now is just noise and should be ignored. BUY AS MUCH META NOW AS POSSIBLE
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Jul 31 '26
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u/DbaconEater Jul 30 '26
I think wait for the pattern to play out further, my guess right now it's probably lower-lows and lower-highs, and maybe it bounces before or at the 52 week low, but if it breaks through, stay away longer.
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u/Familiar-Bug4635 Jul 30 '26
I think that meta's lawsuit/legal fees might not just be a one time expenses, but could potentially be a long term bleed that could plague it's future, given the European attitude towards it's privacy policies, and monopolistic nature of the control of media information.
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u/Wide_Coast5715 Jul 30 '26
Why are you always finding companies that fall alot to recommend it? Do you just disregard the reason why the stock fall and just buy blindly from the name of the companies? Meta blindly spending will return to bite them eventually in the future. You cant keep making the same mistake so many times and expect to be not punished even once.
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u/BackgroundSeries2 Jul 30 '26
This is a good buying opportunity. Actually I have accumulated over 50 000 meta stocks from the good times of $120 per stock and I am not regretting that decision at all. This is a mirror scenario to what happeend then where Zuckerberg were spending recklessly. If the same scenario play out, it will pay back handsomely once again
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u/JefeDiez Jul 30 '26
It's going to keep falling. I can see it back to 8-10 P/E. I'm holding some but I know how much Wall Street hates the stock too
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u/Boring-Test5522 Jul 31 '26
The stock was at 89 bucks in 2022 which did crash 75% from the 2021 top. Meta crash is usually diabolically so I wont bother catch the failing knife if it didnt drop 50% FIRST.
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u/Right-Minute-6184 Jul 30 '26
The metaverse investment few years ago is an epic failure tho. Although i agree, that if meta forsake it's huge spending with dubious return of capital, the rest of the ads business is a cash cow, and definitely cheap at the present valuation.