I think this is one of the clearer articulations I’ve seen of why Meta keeps being misread rather than mismanaged.
What you get exactly right is that analysts keep trying to value Meta as a revenue stream instead of as a sovereignty project. Once you frame Apple and Google as landlords rather than partners, the Reality Labs spend stops looking like hubris and starts looking like a tax-avoidance strategy at civilisational scale. That shift alone explains most of the persistent mispricing.
I also appreciated the way you treated open source not as ideology but as instrumentation. The “market sonar” framing is accurate and under-discussed. React, PyTorch, and LLaMA function less as products and more as early-warning systems for where developer gravity is moving. Most investors still miss that Meta is effectively outsourcing discovery while internalising only the compounding edge.
Where I would gently push is on timing confidence. The logic of the endgame is sound. The execution risk is not trivial. Owning the stack only pays off if developer lock-in materialises before platform fatigue sets in, and history is not kind to companies betting that users will patiently wait for new continents to emerge. That does not invalidate the strategy, but it does put a premium on capital discipline during the transition.
Overall though, this is strong work. You are analysing Meta as a system of incentives and constraints rather than a bundle of apps, which is how serious capital should be thinking about it. I restacked because more people need to understand that this is not a bet on ads or headsets, it is a bet on who owns the next toll booth.
Wrt to the timing-- good nuance. I don't really touch on the premium for two factors-- 1. Meta is already wildly profitable and the opportunity cost for investment there is relatively low since they don't have many big market expansion bets currently (it's mostly just expanding their existing bets). 2. Not doing it is existential, as written. So for Meta as a company there aren't that many more options. Personally would have preferred that they sunk these resources into Deepmind style moonshots to see more great things come out of it, but that's also just the naive idealist in me talking. From that frame personally think that there isn't that much else Meta can do. That premium is a factor for other investors and founders who are also sailing ship for the Metaverse continent who might be seen as having more options.
Lmk if that makes sense, or if I misunderstood your Comment.
Thanks heaps, Devansh. An exceptional and deeply thought-provoking read, which I revisited after the recent drawdown to make sure I pay less attention to the noise.
what a fantastic article. It validates everything I thought about and many other things, which i did not think through. Love the Altruism part, platform part. Love everything.. I very much concur, many SMB's rely on Insta, without Insta there's no business, so if you are expecting SMB's to cut ads on Insta.. well hello.. ain't happening.
Thoughtful analysis, even if there are parts I disagree with. The verdict is still out on many of Meta's initiatives. However, crazy initiatives like the Metaverse or Superintelligence wouldn't be possible at Google or Apple... where the founders aren't in charge anymore. A certain insane ambition is the privilege of founders, not executives. And hey, once upon a time, everyone laughed at Zuckerberg for acquiring a photo-sharing app for $1 billion.
Meta's social media format means it can reach end-user directly, which made their data traffic recession resilient. Its income mainly comes from Ads, whose productivity and cost is primed to be super charged by AI. Google search page as a knowledge acquisition platform is under more immediate pressure than facebook's social media page approach as the way it is shaping now.
Their usage is recession resilient but I don't think their core business is. I spoke to multiple people on ads and the analysis of ads being tied to economic cycles came from them
Wow! Wow! What a deep dive into Meta! I am technician at heart but I keep abreast of my fellow SSers views..try to tie the technical strength to what I read. Sometimes they jive as market is forward looking mechanism. It is high priced stock.. I don’t trade it directly. Sometimes I take positions in MAGS..mag 7 etf..so that is indirect participation. I am going to take a fresh look at both FB and MAGS
Wrt to the timing-- good nuance. I don't really touch on the premium for two factors--
1. Meta is already wildly profitable and the opportunity cost for investment there is relatively low since they don't have many big market expansion bets currently (it's mostly just expanding their existing bets).
2. Not doing it is existential, as written.
So for Meta as a company there aren't that many more options. Personally I would have preferred that they sunk these resources into Deepmind style moonshots to see more great things come out of it, but that's also just the naive idealist in me talking.
From that frame I personally think that there isn't that much else Meta can do. That premium is a factor for other investors and founders who are also sailing ship for the Metaverse continent who might be seen as having more options.
Lmk if that makes sense, or if I misunderstood your comment.
I think this is one of the clearer articulations I’ve seen of why Meta keeps being misread rather than mismanaged.
What you get exactly right is that analysts keep trying to value Meta as a revenue stream instead of as a sovereignty project. Once you frame Apple and Google as landlords rather than partners, the Reality Labs spend stops looking like hubris and starts looking like a tax-avoidance strategy at civilisational scale. That shift alone explains most of the persistent mispricing.
I also appreciated the way you treated open source not as ideology but as instrumentation. The “market sonar” framing is accurate and under-discussed. React, PyTorch, and LLaMA function less as products and more as early-warning systems for where developer gravity is moving. Most investors still miss that Meta is effectively outsourcing discovery while internalising only the compounding edge.
Where I would gently push is on timing confidence. The logic of the endgame is sound. The execution risk is not trivial. Owning the stack only pays off if developer lock-in materialises before platform fatigue sets in, and history is not kind to companies betting that users will patiently wait for new continents to emerge. That does not invalidate the strategy, but it does put a premium on capital discipline during the transition.
Overall though, this is strong work. You are analysing Meta as a system of incentives and constraints rather than a bundle of apps, which is how serious capital should be thinking about it. I restacked because more people need to understand that this is not a bet on ads or headsets, it is a bet on who owns the next toll booth.
Wrt to the timing-- good nuance. I don't really touch on the premium for two factors-- 1. Meta is already wildly profitable and the opportunity cost for investment there is relatively low since they don't have many big market expansion bets currently (it's mostly just expanding their existing bets). 2. Not doing it is existential, as written. So for Meta as a company there aren't that many more options. Personally would have preferred that they sunk these resources into Deepmind style moonshots to see more great things come out of it, but that's also just the naive idealist in me talking. From that frame personally think that there isn't that much else Meta can do. That premium is a factor for other investors and founders who are also sailing ship for the Metaverse continent who might be seen as having more options.
Lmk if that makes sense, or if I misunderstood your Comment.
Thanks heaps, Devansh. An exceptional and deeply thought-provoking read, which I revisited after the recent drawdown to make sure I pay less attention to the noise.
<3
The way you outline Meta’s AI Flywheel and open-source strategy really clarifies how AI can serve as both an internal engine and a market signal.
what a fantastic article. It validates everything I thought about and many other things, which i did not think through. Love the Altruism part, platform part. Love everything.. I very much concur, many SMB's rely on Insta, without Insta there's no business, so if you are expecting SMB's to cut ads on Insta.. well hello.. ain't happening.
Yep
Beautiful photos on this
Thank you
Thoughtful analysis, even if there are parts I disagree with. The verdict is still out on many of Meta's initiatives. However, crazy initiatives like the Metaverse or Superintelligence wouldn't be possible at Google or Apple... where the founders aren't in charge anymore. A certain insane ambition is the privilege of founders, not executives. And hey, once upon a time, everyone laughed at Zuckerberg for acquiring a photo-sharing app for $1 billion.
If you have some time, would love to hear your thoughts in more detail
Meta's social media format means it can reach end-user directly, which made their data traffic recession resilient. Its income mainly comes from Ads, whose productivity and cost is primed to be super charged by AI. Google search page as a knowledge acquisition platform is under more immediate pressure than facebook's social media page approach as the way it is shaping now.
Their usage is recession resilient but I don't think their core business is. I spoke to multiple people on ads and the analysis of ads being tied to economic cycles came from them
Wow! Wow! What a deep dive into Meta! I am technician at heart but I keep abreast of my fellow SSers views..try to tie the technical strength to what I read. Sometimes they jive as market is forward looking mechanism. It is high priced stock.. I don’t trade it directly. Sometimes I take positions in MAGS..mag 7 etf..so that is indirect participation. I am going to take a fresh look at both FB and MAGS
Lmk how it goes
Wrt to the timing-- good nuance. I don't really touch on the premium for two factors--
1. Meta is already wildly profitable and the opportunity cost for investment there is relatively low since they don't have many big market expansion bets currently (it's mostly just expanding their existing bets).
2. Not doing it is existential, as written.
So for Meta as a company there aren't that many more options. Personally I would have preferred that they sunk these resources into Deepmind style moonshots to see more great things come out of it, but that's also just the naive idealist in me talking.
From that frame I personally think that there isn't that much else Meta can do. That premium is a factor for other investors and founders who are also sailing ship for the Metaverse continent who might be seen as having more options.
Lmk if that makes sense, or if I misunderstood your comment.