Fortnightly Publication Highlighting Latest Insights From IRF Providers
Company Research
AI & Big Tech: Hunger Games, coming soon
Technology
Arete reviews the surge in Big Tech capex, with their forecasts 20-40% above consensus. They note the mismatch of long-term deals and shortening tech life cycles and accelerated depreciation, believing it will require Big Tech to address new TAMs or target each other’s businesses. Their report weighs whether this spending boom will prove to be a “bubble” and identifies who is most exposed. Arete sees Alphabet, Meta, Apple and Amazon all seeking to “own” a customer interface layer as GenAI products move into mainstream adoption.
Edition: 223
- 31 October, 2025
Communications
META is doubling down on AI infrastructure, raising its 2025 capex forecast to $64–72bn as it accelerates data centre construction amid rising costs. CEO Mark Zuckerberg is committed to making META a leading AI platform and insists on building in-house capacity to avoid reliance on others. While the AI strategy (centred on open source) is progressing well, it comes with a steep price tag, notably the ongoing $4bn+ quarterly burn at Reality Labs. Richard Windsor sees a growing risk of AI infrastructure overbuild, with META, Google, Microsoft and Amazon all ramping up spend - setting the stage for a painful correction. Despite this, META’s core business remains solid, with strong Q1 performance and improved operational efficiency via AI. At 23.5x FY25 PER, META is reasonably valued, but Richard prefers Google, where AI disruption risks from players like OpenAI are, in his view, overstated.
Edition: 210
- 02 May, 2025
Technology
Revelare recently hosted a call for their clients on APP’s e-commerce advertising expansion. Their guest speaker was Jonathan Snow, co-founder at Avenue Z, an advertising, performance marketing and PR agency managing $75m+ in digital media spend annually across APP, Facebook, Instagram, TikTok Shop, Snap, among other platforms. Mr. Snow provided an update on his agency’s use of APP’s advertising platform for ecommerce clients, growth of brands on the platform, APP’s performance relative to Meta, growth of advertising budgets for APP, how they test for incrementality, audience demographics, CPMs, improvements to the tech stack, and competition from Unity and Liftoff, among other topics.
Edition: 208
- 04 April, 2025
Communications
META shares have had an incredible run this year driven by a stabilisation in margins, a depressed multiple and negative sentiment. However, Rickin Thakrar recommends taking profits given his 1) DCF valuation has the company priced for perfection. 2) Two-year growth rates remain sluggish (a sequential improvement in MAU and DAU has been driven by easy comps). 3) Mark Zuckerberg has been selling shares for the first time in a couple of years. Rickin believe the shares could once again retest the $270 level (20%+ downside).
Edition: 176
- 22 December, 2023
Communications
Zuckerberg giveth and he taketh away - the benefits from another round of job cuts look set to be offset by the decision to cut prices on VR headsets due to flagging sales. Richard Windsor suspects that META has been losing >$200 for every device shipped and if volume returns to ~1m per month this will increase the losses at Reality Labs by anything up to $800m per year. Richard still thinks there is far more that Zuckerberg could do to increase profitability and if this were to occur then the stock would look very cheap indeed. However, he is not convinced this will happen meaning the value proposition remains uninteresting with >20x PER ratio being demanded for negative growth.
Edition: 156
- 17 March, 2023
Communications
Using Cash Flow Returns On Investments based valuation tools, Meta Platforms is looking significantly undervalued. ROCGA’s portal has been built using the Cash Flow Returns On Investments methodology. It allows you to identify, research and value listed companies. They have 15 years of clean fundamental data and you can model and assess companies in seconds. Current coverage: 1,010 North American, 515 UK and 440 European companies. Other companies identified include eBay, United Parcel Service and Adobe. More details on ROCGA’s systematic and interactive valuation tools can be found here. A free trial is available on request.
Edition: 152
- 20 January, 2023
Communications
Too cheap to ignore - this 35-page report focuses on why social media companies, especially Meta, look very attractive. Yes, there is a lot of noise around FB, but it is worth sifting through it as all the problems are short term in nature with plenty of free upside options. Abacus sees tailwinds for (sustainable) 10%+ revenue growth and margin expansion. Net income (GAAP) approximately doubles by 2025 from 2022 levels. The stock currently trades at close to intrinsic value; offers minimal downside with potential for 100% upside over 3-yrs.
Edition: 133
- 14 April, 2022
Technology
Inflection Point Research, LLC
A Cloudy future is a good one - ANET is in a great competitive position, with tailwinds across all its end markets and product lines. Michael Fox points to the ongoing and accelerating networking upgrade cycles at Microsoft and Meta Platforms, in addition to greenfield business ramping at Alphabet as reasons to be bullish. Add to that share gains in an increasing TAM for enterprise / campus and you get the best networking growth story for the next two years.
Edition: 131
- 18 March, 2022
Meta Platforms / Facebook (FB)
Communications
Trip around the Digital Life Pie begins - FB's acquisition of VR fitness company Within will be the first of many as it looks to acquire the technologies and services that it lacks in order to have a complete ecosystem for the Metaverse (where the green shoots of early beginnings are springing up in VR and in Oculus particularly). While Richard Windsor believes the stock will remain under pressure in the near-term (PR problems), FB will be one of the cheapest ways to play the Metaverse theme.
Edition: 123
- 12 November, 2021