Meta is Now an AI Powerhouse.
1.0 Meta Still has Asymmetric and Exponential Upside Ahead
A thus far quiet deployment of AI has made Meta relevant again, with engagement metrics trending in the right direction. As the network evolves to span 50%+ of the world´s population and Meta continues to invest in its AI infrastructure, it is gearing up to command a level of power unseen in human history.
In my Meta deep dive last November, when the pessimism surrounding the stock was inescapable, I pointed out three things in conflict with the narrative:
Meta was not betting the house on the Metaverse. Instead, it was allocating most of its capital towards Family of Apps (Facebook, Instagram, Messenger, Whatsapp).
In turn, far from being thrusted into irrelevance by TikTok, back then it was actually gearing up to give its Family of Apps a second and potentially far more explosive life, by enhancing the applications with AI and thus promoting content discovery. I also pointed out that this, in turn, was enabled by a cultural revamp.
The narrative that Meta was not able to monetize Whatsapp was not true. By Q3 2022 Meta was making $9B annually from its new click-to-messaging platform, which enables merchants to interact with potential customers via Whatsapp after they click on an ad.
Looking back, these observations seem to have accurately reflected reality. Now, Meta has surfaced as an AI powerhouse and its Family of Apps has notably gained in relevance since. Whatsapp/messaging monetization is also advancing well and the company is again mean and lean.
Here is the data regarding how AI has enhanced Family of Apps:
Keep reading with a 7-day free trial
Subscribe to Investment Ideas by Antonio to keep reading this post and get 7 days of free access to the full post archives.