Ackman's Pershing Square Acquires Stake in Meta, AI Potential Undervalued
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy META?
Source: seekingalpha
- Investment Strategy: Ackman's Pershing Square acquired approximately 10% of Meta by the end of 2025, believing that the current share price undervalues the company's long-term potential in AI, thus presenting a deeply discounted investment opportunity for stakeholders.
- New Investment Moves: Over the past 12 months, Pershing Square has also taken new stakes in Amazon and Hertz, reflecting ongoing confidence and strategic positioning within the tech sector, which may further enhance the market performance of these companies.
- Growing Cloud Demand: Cloudflare CEO Matthew Prince highlighted that the proliferation of AI is driving increased demand for the company's networking and security products, indicating a fundamental replatforming of the internet that provides new growth momentum for Cloudflare.
- ByteDance AI Chip Initiative: ByteDance is in talks with Samsung to produce an AI chip it is developing, aiming to receive sample chips by the end of March and eventually manufacture 350,000 units, although the company has stated that information about the project is inaccurate, indicating its active exploration in the AI domain.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 649.810
Low
655.15
Averages
824.71
High
1117
Current: 649.810
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Surge in Capex: The capital expenditure forecast for 2026 has been raised to between $115 billion and $135 billion, nearly doubling the $72.2 billion spent in 2025, leading to a divide among investors regarding the sustainability of this spending plan.
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- Strong Profitability: Meta anticipates Q1 2026 revenues between $53.5 billion and $56.5 billion, implying growth rates as high as 34%, and despite spending pressures, the company maintains strong cash flow and profitability metrics.
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- Wealth Management Under Pressure: Wealth management firms such as St James's Place and Aberdeen Group have suffered severe losses, reflecting market panic over the potential effects of AI, leading to deep financial setbacks for these companies.
- Analyst Warnings: UBS analysts have cautioned that the AI-driven sell-off signifies a
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- Nvidia's Growth Potential: Nvidia is projected to see a 52% revenue increase in FY 2027, primarily driven by over $500 billion in capital expenditures planned by Amazon, Alphabet, and Meta for data centers in 2026, which will significantly boost orders for its computing units and further accelerate growth.
- Strong Performance from Microsoft: Following its Q2 FY 2026 earnings, Microsoft exceeded expectations with Azure's cloud platform achieving a 39% year-over-year growth, and despite a drop in stock price, this presents an excellent buying opportunity for investors, highlighting its critical role in the AI investment trend.
- Meta's Low Valuation: With a forward P/E of 22.2, Meta is undervalued despite a 22% revenue growth in Q4 2025 and projected growth rates of 25% and 17% for the next two years, suggesting that investors can capitalize on this low valuation to acquire shares of a company expected to outperform the market's typical growth rate.
See More
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- Microsoft Cloud Performance: Microsoft's Q2 FY 2026 earnings report revealed a strong 39% year-over-year growth in its Azure cloud platform, and despite a stock price decline, the management's performance exceeding expectations presents a buying opportunity for investors, highlighting its critical role in the AI investment trend.
- Meta Platforms Valuation Appeal: Trading at a forward P/E of 22.2, Meta Platforms is valued similarly to the market average, yet it is expected to grow revenue by 22% in Q4 2025 and 25% this year, indicating a growth rate that significantly outpaces the market, allowing investors to capitalize on this undervaluation.
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