Artem Voloskovets
⬤ Meta Platforms (NASDAQ: META) might be entering value territory after a bruising few months. The stock is now trading at roughly 20 times earnings—a relatively low multiple for a tech giant of Meta's caliber—and that's got some investors wondering if it's time to jump back in.
⬤ Meta's stock has fallen from around $790 to $610 over the past three months, a drop of about 23%. The slide picked up steam in late October as concerns mounted over soaring AI infrastructure costs, slower ad growth, and the ongoing cash burn from Reality Labs. Even with solid revenue and user numbers, Wall Street isn't thrilled about tighter margins and the hefty long-term spending commitments.
⬤ The big question is whether Meta's heavy bets on AI, the metaverse, and data centers will eventually pay off. A 20x earnings ratio looks attractive for a company of Meta's size, but there are real risks: potential regulatory crackdowns, fierce competition from TikTok and YouTube, and broader economic pressures that could dampen digital ad spending. For value investors, it comes down to whether the growth story can justify all that capital intensity.
⬤ Some analysts see Meta's valuation reset as a potential entry point for long-term investors—especially if the company keeps generating strong cash flow and maintains its ad dominance. A 20x multiple for a profitable tech giant with Meta's innovation pipeline is historically cheap. That said, sentiment is shaky, and volatility could stick around for a while.
⬤ Meta is currently trading near $610, down roughly $180 in just three months. The sharp sell-off and compressed valuation have reignited the debate: is this short-term panic, or a more fundamental shift in growth expectations? Until there's more clarity on Meta's AI returns and cost structure, the question of whether META is a bargain or a value trap will likely keep investors divided.
Artem Voloskovets
