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Ahoy Metamates! 🚢 🏴‍☠️

The tides are shifting. While some continue to be concerned about tampon availability in male bathrooms, there’s a much more grim reality setting in across tech. The vibe is very off.

Meta is returning to its core roots

There used to be a time where being a SWE at Meta = elite, PMs did not have MBAs (and most could code), and working there was so intensely competitive that stories like this one worried everyone. Then, a combination of Sheryl leaning in, softcore hiring during COVID and a slew of product experiments like Novi opened the floodgates. Basically, if you grokked the interview process and had a non-idiot refer you - you could bag that $500 TC.

No more.

People are mistakenly ascribing the current layoffs as a DEI vs MEI issue. That’s not what’s happening - Meta valued diversity way before it was cool everywhere else.

The issue is simpler: Mark is pissed.

Meta got hammered by analysts last year and meanwhile, employees were:

• Creating TikToks about how they’re basically not working - exhibit 1

• Snitching on the company to the press - exhibit 2

• Focusing on activism at work vs productivity output - exhibit 3

TLDR: It’s time to build again.

And now - Earnings Call Review

Stock analyst projections (which of course take with a grain of salt and do your own research before you invest - is this disclaimer long enough?) are looking particularly generous this quarter:

12 month outlook:

• Bull: $875

• Base: $760

• Bear: $610

Top analysts I track:

Doug Anmuth JPMC - BUY @ $725 (79.5% historic success rate)

Eric Sheridan Goldman - BUY @ $765 (80% historic success rate)

Brian Nowak Morgan Stanley- BUY @ $660 (65% historic success rate)

**The take- away from this, other than Brian Nowak continues to disappoint me quarterly, is that we’re in the real of possibility to break into the Bull case of $875 with a few strong quarters.

Perhaps the biggest surprise, is Piper Sandler, who bases their analysis on directly buying Meta ads themselves, jumped estimates from $670 > $775. They tend to be a lot more conservative so this speaks volumes to me, personally.

But back to Brian Nowak - here’s how his team sees the spread of price probabilities:

…and here’s how the multiples shake out according to Morgan Sranley:

TLDR: Performing strong as I predicted in the last issue but AI infra costs become a key issue across all analysts.

TLDR #2: If you hold RSUs, time to look at those tax lots that are eligible for tax loss harvesting (if any) or look at other places in your portfolio you can shake that out. Meta stock growth also means you need a better tax strategy.

The Four Key Themes This Quarter

Since no one but me listens to the Earnings Call- here y’all go:

1. AI Infrastructure Transformation

• Meta is building a massive 2GW AI datacenter that would cover "a significant part of Manhattan"

• Moving from pre-training focus to more inference/reasoning compute

• Developing custom MTIA silicon chips, starting with ranking/recommendations but expanding to training workloads in 2026

• Extended server lifespans to 5.5 years = confidence in their hardware strategy despite rapid AI advancement

2. Strategic Product Evolution

• WhatsApp @ 100M MAUs in US

• Threads hit 320M MAU with 1M+ daily signups

• Meta AI already has 700M MAU, making it the most-used AI assistant

• Introducing "Edits" app for Reels creation = commitment to creator tools despite TikTok competition

3. Monetization Philosophy Shift

• New "Andromeda" ML system with Nvidia enabled 10,000x increase in ad retrieval model complexity

• Advantage+ shopping campaigns reached $20B ARR, growing 70% YoY

• 4M advertisers using AI creative tools (up from 1M in six months)

• Deliberately holding back on Meta AI monetization until reaching 1B+ users, prioritizing scale over immediate revenue

4. Cultural and Competitive Positioning

• Explicit focus on becoming the dominant "American" AI standard

• Returning to "OG Facebook"

• Ray-Ban Meta glasses positioned as AI device first, AR device second - a notable shift in mixed reality strategy

• Emphasis on Trump support for tech companies

What analysts thoughts was dicey after the call-

• Growing Reality Labs losses ($5B in Q4)

• Is Meta's massive AI spending is justified given rapid technological changes ( read: DeepSeek)

• Concerns about WhatsApp business AI adoption in developed markets

• Skepticism about Meta's strategy of reaching 1B users before focusing on monetization

Unrelated to earnings - is Meta building a robot?

As if Reality Labs has not lost enough money - yes, they’re now building a humanoid robot and Ex-Cruise CEO Marc Whitten is apparently running it. And household chores being the initial target. Let me state the obvious: this is highly idiotic.

This has been in some kind of discussion since 2002 when this patent was filed: Meta patented a robotic eyeball inside of a humanoid head covered in a material resembling human skin.

The idea behind this particular patent being that the “eye” learns from a human POV

The game-plan currently does not involve a Meta-branded robot, rather an investment from Meta to companies in the space that can carry its AI:

The way I read this is - Meta is making a build vs buy decision.

• Unitree is a Chinese company = build.

• Figure is the leading humanoid robotics play in the US= buy.

My eye is on companies like Physical Intelligence that are specifically focused on household chores robotics - if Meta starts quietly buying those up to acquihire the founders, it’s prime time.

In the mean time, here’s a robot doing laundry:

Bonus Chart

People seem to really love Meta’s glasses:

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