Dad Invests

Just uploaded the analysis on $META One observation that stuck me is that Meta is about to overtake mighty Google as the #1 digital advertising company on the planet. Let that sink in. eMarketer projects 2026 ad revenue: 🔹 Meta: $243.5 Billion 🔹 Alphabet: $239.5 Billion This is the first time in digital advertising history that Google will not hold the top spot. Link to report: drive.google.com/drive/folders/… Q1 2026 shows why this is happening. Revenue: $56.3 billion, up 33% YoY. That is a $200 billion annual run-rate business growing at a pace usually reserved for mid-cap companies. Ad impressions grew 19% while price per ad rose 12%. Volume AND pricing expanding simultaneously. That is the AI flywheel at work. The AI story goes deeper than ads. Business AI conversations on WhatsApp and Messenger hit 10 million per week, a 10x increase in just three months. Zucks is positioning AI agents as the next revenue layer: automated customer service, sales, and marketing for businesses across emerging markets where WhatsApp IS widely used. If Meta monetizes even 5% of business interactions at $0.05-0.10 per conversation, that is $15-30 billion in incremental annual revenue. But here is the number that is keeping me on the sidelines: $125-145 billion capex. They are spending 50-57% of projected revenue on AI infrastructure. They raised $25 billion in bonds. And now they are exploring a large equity offering that could dilute existing shareholders by 2-3%. Reality Labs has burned over $90 billion in cumulative losses with no profitability timeline. Revenue there actually declined 2% YoY to $402 million while losing $4 billion in a single quarter. The core advertising business has never been stronger. 3.56 billion daily active users. AI-driven ad targeting that is structurally superior to every competitor. 41% operating margins at scale. This is a genuinely world-class franchise. The question is not whether Meta can grow revenue. It can. It will. The question is whether management's decision to reinvest $125-145 billion into AI infrastructure, while pausing shareholder returns and potentially diluting ownership, will create value or destroy it. The metaverse bet cost $90 billion with nothing to show for it. This AI bet is even larger. Valuation Remains Reasonable for a 25%+ Growth Company. At 20x forward earnings with 26% revenue growth projected in 2026, Meta trades at PEG 0.91, below the S&P 500 average of ~1.5x. Re-rating to PEG 1.2-1.5x implies $750-900, representing 25-50% upside. I am currently not invested, but watching closely.