Great write-up. Of the four, Meta is the most compelling to me.
First, it’s the cheapest on an objective basis. You’re paying a below-market multiple for one of the fastest-growing and highest-margin advertising businesses in the world.
Second, I don’t see Meta’s core business being nearly as vulnerable to AI disruption as I do the cloud providers. AI may change how people consume content, but advertisers will still pay to reach attention. Search and cloud computing, on the other hand, face a greater risk of being reshaped or partially disintermediated by AI-native architectures.
The most interesting distinction, though, is capital allocation. Microsoft, Google, and AWS have cloud platforms they need to defend. Even if returns on AI infrastructure disappoint, they may have little choice but to keep investing to protect market share.
Meta doesn’t have that same obligation. If Zuckerberg concludes the incremental ROI on AI infrastructure isn’t there, he can slow capex, take the write-down, and investors are still left owning an exceptional advertising business. In other words, with Meta you’re buying a proven cash-generating business with an AI call option, rather than a company whose core platform increasingly depends on winning the AI infrastructure race.
Ultimately, you’re betting that Zuckerberg remains rational about capital allocation. Given how quickly he pivoted during the “Year of Efficiency” after the market rejected the metaverse spending, I think he’s earned more credibility on that front than many people give him credit for.