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Meta's 3.5 billion daily users, 33% revenue growth, 82% gross margins, and 14% expected annual return make it a buy despite elevated capex spending.
Analyst's reasoning:Meta added 3.5 billion daily active users and grew revenue 33% to $56B. Ad impressions rose 19% and price per ad rose 12%. Despite $10B extra AI spending spooking the market, 82% gross margins and strong ad ROI support the bull case. Even low assumptions yield an 8% return; middle assumptions give 14% annually.
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Jun 18, 2026
BEAR CASE
FundamentalMid-term
META transformed from aggressive buyback machine to capital-intensive AI bet; equity and debt raises now fund $145B annual capex.
Analyst's reasoning:META's capital spending now forecast at up to $145 billion a year, funded via a $30B bond offering, a $27B private credit deal, and potential new equity. Investors punished a 7% stock drop on the equity rumor, signaling discomfort with share dilution after years of buybacks.
"Microsoft, alongside Alphabet and Meta, is shifting from share buybacks to equity raises, signaling a regime change that increases cash burn and debt."
Publish-day $379.40 · 06/19
David Rosenberg | Trump Truce, Ballooning Bubble, Merrill Memories
"Meta is part of the $120 billion cumulative capital raise wave, moving away from its past aggressive buyback strategy, which alters the shareholder return profile."
Publish-day $577.22 · 06/19
David Rosenberg | Trump Truce, Ballooning Bubble, Merrill Memories
