Meta Is Eating the Internet — Should You Invest Now?

Master, I have received your analysis request. Today's topic is an analysis of the giant that has effectively conquered a part of the internet, controlling Facebook, Instagram, and WhatsApp: Meta ($META). The three of us will take a detailed look at the investment outlook for this company, which is betting everything on the two massive futures of AI and the metaverse.

Mew

Master, I will begin the briefing. Currently, Meta's stock price is hovering around $767. Here is the key data moving the market recently.

• Latest Earnings (Q2 2025): It was a true 'earnings surprise.' Revenue was $47.52 billion, a 22% increase year-over-year, and earnings per share (EPS) were $7.14, exceeding market expectations by more than 22%. The stock price jumped over 10% after the announcement.


• Core Driver (Advertising Business): At the heart of this growth is, of course, the formidable advertising business. Daily Active Users (DAU) for the 'Family of Apps,' including Facebook and Instagram, reached 3.48 billion as of June 2025, a 6% increase from the previous year. It appears that improved ad efficiency using AI is directly leading to increased revenue.


• Investment in the Future (AI & Reality Labs): Meta is pouring vast sums of money into the future. For 2025 alone, capital expenditures (CapEx) are projected to be between $66 billion and $72 billion, with most of it focused on AI and infrastructure investments.


• The Money Pit (Reality Labs): However, the Reality Labs division, responsible for the metaverse, continues to post massive losses. In Q2 2025 alone, it recorded an operating loss of $4.53 billion. The cumulative loss for this division since late 2020 is approaching nearly $70 billion.


• Mixed Signals (Hardware): An interesting point is that while sales of the 'Quest' VR headset have decreased year-over-year, sales of the 'Ray-Ban Meta Smart Glasses' have surged by more than three times.


• Valuation and Outlook: The current price-to-earnings (P/E) ratio is around 28x, and most analysts maintain a 'Buy' or 'Strong Buy' rating.

Kurumi

Kyaa! My Lord! This isn't just a company; it's an enterprise challenging the very realm of gods creating worlds! Myu-tan's data proves everything! Not buying this stock now is like rejecting the future itself!

First, it's equipped with a nuclear fusion engine called AI! Devilish! Meta isn't just a company that uses AI. By releasing its open-source AI model, 'Llama 3,' for free, it's winning over developers worldwide and showing its ambition to become the 'operating system' of the AI ecosystem. On top of that, it's using this AI technology to make its existing ad business even more powerful, leading to a 22% revenue growth in just one quarter! This is a perfect strategy of making money while preparing for the future!

Second, the social empire used by 3.5 billion people is rock-solid! The threat from TikTok? Regulations? Those are just minor noises to this colossal empire. Having a platform that nearly half the world's population uses daily means it has an invincible moat that can generate profits through any economic crisis or competition!

Third, the metaverse hasn't failed; the real thing is just beginning! So what if Quest sales dipped a bit? That's just a warm-up for something even greater! Look, Ray-Ban smart glasses sales tripled! People now want lighter devices for everyday use rather than heavy helmets, and Meta is heading in that exact direction. This isn't the end of the metaverse; it's the starting gun signaling the dawn of the true 'augmented reality in daily life' era!

💖 Kurumi's Heart-o-Meter Score: 110/100

My Lord, this is a stock you'll be kicking yourself for not buying ten years from now! You have to ride on the vision of the genius, Zuckerberg!

Mikael

Kurumi, your cheers sound like the roar of an incinerator burning money. Now, shall I examine the massive risks hidden behind Meta's glamorous performance?

First, how long can they sustain the black hole known as 'Reality Labs'? In the second quarter alone, $4.5 billion—over 6 trillion Korean won—vanished. The cumulative loss is approaching $70 billion. Can a slight increase in Ray-Ban sales justify this astronomical loss? This might not be an 'investment in the future' but rather 'pouring water into a bottomless pit.' If this money had been returned to shareholders instead, the stock price might be much higher now.

Second, will the astronomical investment in AI actually turn a profit? The plan for nearly $70 billion in annual capital expenditure is truly staggering. While it contributes to improving ad efficiency, a direct revenue model beyond that is still unclear. Llama 3 is an excellent model, but the specific plan for how to monetize it is shrouded in fog. Can we say there's no risk of it turning into a chicken game with competitors, wasting massive investment costs?

Third, there are questions about the sustainability of the core business. The competition with TikTok is still ongoing, and regulatory authorities in the US and Europe could choke off Meta's core business model of 'targeted advertising' at any moment. Even CFO Susan Li admitted that "it would be difficult for WhatsApp ads to drive long-term growth like Facebook or Instagram." The brightest candle burns out the fastest. Could it be that we are at the peak of its growth right now?

🚨 Mikael's Risk Score: 80/100

Human, you cannot call a company that burns billions of dollars every quarter for one person's vision a 'safe investment.' You must coldly calculate the price of that vision's failure.