I keep hitting the buy button on Meta, and the September deadline is the reason I refuse to stop before then.
The pull for me is simple. Meta Platforms (NASDAQ:META | META Price Prediction) owns the demand side of the AI economy. Every quarter, 3.56 billion people show up on Facebook, Instagram, WhatsApp, and Threads, and Mark Zuckerberg gets to charge advertisers more to reach them. That is the flywheel I bought, and it is still spinning faster than the price implies.
The Receipts I Keep Coming Back To
Q1 2026 is the receipt. EPS came in at $10.44 against a $6.66 consensus, a 56.79% beat, and the fifth quarter in a row Meta has cleared the bar. Revenue hit $56.31 billion, up 33.1% year over year. The engine underneath: ad impressions climbed 19% while average price per ad rose 12%. Volume and pricing together define a business with genuine pricing power.
The balance sheet backs the story. Return on equity sits at 30.24%, return on invested capital at 20.69%, and operating margin at 41.4%. Debt to equity is 0.39 and interest coverage is 71.5x. Meta paid $1.35 billion in Q1 dividends and returned $26.25 billion through buybacks across 2025. At a P/E of 24 and a forward P/E of 21, the multiple stays reasonable for a compounder of this quality.
Why September Changes the Math
In September, Meta begins mass production of Iris, its proprietary fourth-generation AI chip co-developed with Broadcom and manufactured by TSMC. Iris is tuned for Meta’s recommendation and core app workloads and anchors a roadmap to 14 gigawatts of compute by 2027. Vertical integration on silicon is how a company earning 82.0% gross margins protects those margins while capex guidance runs to $125 to $145 billion this year.
This capex-meets-monetization setup is exactly the pattern we walk through in our free research briefing, 7 Stocks Powering the AI Boom (That Aren’t Chipmakers), which looks at the platforms turning AI infrastructure spend into durable earnings.
Why Not Broadcom Instead
Broadcom (NASDAQ:AVGO) is my other AI holding, and it is a fine business. Q2 FY2026 revenue rose 47.9% to $22.19 billion, with AI semiconductor revenue up 143% to $10.80 billion. I own it. I am holding, not adding. Broadcom carries $91.47 billion in total liabilities against $87.69 billion of shareholder equity and trades at a $1.85 trillion market cap while Meta sits at $1.45 trillion on a cleaner balance sheet. Broadcom sells picks and shovels; Meta owns the mine and pays Broadcom to help dig it. When Iris ramps, the vertically integrated buyer captures more of the value.
The Risk I Take Seriously
The capex itself is the risk. Full-year capex was raised to $125 to $145 billion, Reality Labs lost $4.03 billion in Q1 alone and $19.2 billion across 2025, and free cash flow growth slowed to 11.74% year over year. If Iris slips or AI monetization stretches out, the compression gets worse before it gets better. What keeps me buying is the funding source: $32.23 billion in quarterly operating cash flow, $23.43 billion in cash on hand, and interest coverage of 71.5x. That is a cash printer buying its own future compute.
Analysts carry an $828.34 average target against a share price of $661.04. My reason for buying sits deeper: a business earning 30.24% ROE, growing revenue 33% year over year, and about to cut its own GPU bill is worth owning for the next decade regardless of what happens next month. The buy button stays warm.
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