Meta Platforms, Inc. (META): A Bull Case Theory

We came across a bullish thesis on META on Stock Analysis Compilation’s Substack. In this article, we will summarize the bulls’ thesis on META. META's share was trading at $704.81 as of July 22^nd. META’s trailing and forward P/E were 27.55 and 27.93, respectively according to Yahoo Finance.

Meta has quietly built some of the most advanced AI infrastructure globally, using automation to drive stronger-than-expected revenue growth and margin expansion in its advertising platform. Its systems increasingly optimize campaigns end-to-end, from asset generation to testing and flow automation, potentially improving campaign results by 50–100% and deepening advertiser lock-in if CPMs remain stable. Yet this progress is invisible to consumers: Meta has not shipped a breakout product akin to ChatGPT.

Llama 4 was technically solid, but without a compelling interface, Meta risks becoming the most powerful AI-powered ad platform while others, like OpenAI, capture end users and long-term habits—vital moats in consumer tech. Organisational silos further slow Meta’s feedback loop, with research (FAIR), model-building (GENAI), and product teams poorly integrated, in contrast to OpenAI’s product-first structure. Mark Zuckerberg has responded with an aggressive reset, investing $15 billion in Scale AI, bringing CEO Alexandr Wang on board to lead AI efforts, acquiring a stake in NFDG to tap Nat Friedman and Daniel Gross, and poaching top talent from OpenAI, DeepMind, and Apple with lucrative offers.

These moves aim to unify AI efforts and finally deliver consumer-facing products that leverage Meta’s infrastructure, data, and scale. Execution is critical: the building blocks are in place, but until AI is deeply woven into Facebook, Instagram, and WhatsApp, Meta’s distribution edge remains unrealized while nearly a billion users form habits around competitors. Success could unlock immense upside; failure risks relegating Meta to powering the AI era from behind the scenes while others own the customer.

Previously, we covered a bullish thesis on Meta Platforms, Inc. (META) by LongYield in May 2025, which highlighted Meta’s strong Q1 results, margin expansion, and its profitable ad engine funding an ambitious AI strategy. The company’s stock price has appreciated by approximately 23% since our coverage, as AI-driven ad growth outperformed expectations. The thesis still stands as Meta’s fundamentals remain robust. Stock Analysis Compilation shares a similar view but emphasizes execution risks in translating AI infrastructure into consumer-facing products.

META is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 273 hedge fund portfolios held META at the end of the first quarter which was 262 in the previous quarter. While we acknowledge the potential of META as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.