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

We came across a bullish thesis on Meta Platforms, Inc.  on Investment Ideas by Antonio’s Substack by Antonio Linares. In this article, we will summarize the bulls’ thesis on META. Meta Platforms, Inc. 's share was trading at $747.72 as of August 20^th. META’s trailing and forward P/E were 27.13 and 28.25 respectively according to Yahoo Finance.

Meta Platforms’ recent performance highlights how artificial intelligence is transforming its fundamentals, with a direct impact on return on total capital (ROTC). In Q2 2025, AI-driven enhancements in Meta’s recommendation systems increased time spent on Facebook and Instagram by 5% and 6% respectively, while upgrades to the Andromeda model boosted ad conversions by 3% on Facebook Reels and nearly 5% on Instagram. Meta AI itself has now reached 1 billion monthly active users, underscoring its scale and adoption. This progress demonstrates that AI is not a hype cycle for Meta but a tangible driver of engagement, monetization, and ultimately capital efficiency.

From a first-principles perspective, Meta’s ability to convert signals into value through iterative code mirrors the operating models of other companies like Palantir, Spotify, and Duolingo. AI is accelerating this iterative process, enabling faster, more efficient value creation. The structural driver is the continuation of AI scaling laws, where model performance improves exponentially as parameters expand. Meta is therefore providing an early view into how fundamentals across the broader tech landscape may evolve as AI adoption deepens.

On the Q2 2025 earnings call, Mark Zuckerberg noted that Meta’s strong business performance provides the resources to invest heavily in AI. He shared that Meta is already observing its AI systems beginning to improve themselves, an early sign of progress toward superintelligence, defined as intelligence surpassing human capabilities across all domains. Zuckerberg emphasized the company’s vision of bringing personal superintelligence to everyone, ushering in a new era of empowerment and fundamentally reshaping how individuals direct technology toward their goals.

Previously we covered a bullish thesis on Meta Platforms, Inc. (META) by LongYield in May 2025, which highlighted strong Q1 results, AI-driven ad growth, and a solid balance sheet. The stock has appreciated about 30% since our coverage as the thesis played out. The thesis still stands, while Antonio Linares shares a similar view but emphasizes AI’s impact on ROTC.

Meta Platforms, Inc.  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.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None.