Conviction / Hyperscalers and Platforms
META
Meta Platforms Inc.
conviction · held at 6.5%
Meta's advertising business is still growing 28% and the shares are the cheapest of the large technology names after a 27% fall. But its data center spending consumed almost all of its spare cash last quarter, profits missed expectations, and management would not say how much it plans to spend next year.
What we judge
The view on expected return from here, 0 to 100.
Whether the thesis could succeed without this company at all. This moves slowly, and only when the company's position genuinely changes.
What we measure
Facts from market data, not judgments.
| Price | $583.20 |
| 30-day move | -5.3% |
| Position in 52-week range | 23 |
| From the 52-week high | -26.8% |
| Average daily volume | $11.3B |
| Weight in the book | 6.5% |
| Since last rebalance | -9.7% |
Why it is in the fund
Thesis
Open-source Llama models powering agentic AI ecosystem; massive internal AI agent deployment.
Standing judgment
About 27% off the high at roughly 18.4x forward, the cheapest multiple in the book, but below both the 50 and 200 day averages and the only confirmed downtrend in the fund. There is a genuine valuation case here. It is a valuation case, not a thesis case, and this fund is not paid to own the customer.
What changed, and why
Every move in this number carries the reason it moved. A score does not change without new evidence.
| Date | Conviction | Change | Cause | Evidence |
|---|---|---|---|---|
| 2026-08-05 | 52 | -4 | Cut into the weak band because the evidence deteriorated on the exact axis that matters here: Meta buys the backbone rather than metering it, and this quarter its free cash flow was almost entirely consumed doing so, with no 2027 spending guide offered. | Q2 2026 reported 2026-07-29: revenue $60.8B (+28%) and advertising up 27%, but EPS of $6.18 missed the $7.14 consensus and free cash flow collapsed to $784M, down roughly 91% year over year, on $31.1B of quarterly capex. FY26 capex guidance raised to $130-145B and management declined to guide 2027 c |
| 2026-08-05 | 56 | flat | first v3 judgment (v2 score was uninformative, see L-001): The core advertising business is intact and the price is genuinely depressed, but the AI spend is currently consuming the cash flow instead of creating a new metered revenue line, and management declined to size the 2027 commitment. | Q2 2026: revenue $60.8B (slight beat) with advertising at $59.3B, but EPS of $6.18 versus $7.14 expected, a 14% miss. Q2 capex $31.1B drove free cash flow down to $784M. FY2026 capex guide narrowed upward to $135-145B. CFO explicitly declined to give a 2027 capex outlook, citing dynamic infrastructu |
| 2026-08-05 | 56 | -35 | first v3 judgment (v2 score was uninformative, see L-001): The core advertising business is intact and the price is genuinely depressed, but the AI spend is currently consuming the cash flow instead of creating a new metered revenue line, and management declined to size the 2027 commitment. | Q2 2026: revenue $60.8B (slight beat) with advertising at $59.3B, but EPS of $6.18 versus $7.14 expected, a 14% miss. Q2 capex $31.1B drove free cash flow down to $784M. FY2026 capex guide narrowed upward to $135-145B. CFO explicitly declined to give a 2027 capex outlook, citing dynamic infrastructu |
| 2026-07-31 | 91 | -2 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-30 | 93 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-29 | 94 | +3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-28 | 91 | +1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-27 | 90 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-26 | 91 | -3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-25 | 94 | +3 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-24 | 91 | -2 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-23 | 93 | -1 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-22 | 94 | flat | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-21 | 94 | +5 | migrated from v2 (cause not recorded) | v2 `scores` row |
| 2026-07-20 | 89 | -10 | migrated from v2 (cause not recorded) | v2 `scores` row |