$META Yesterday a big bullish candle. The logic behind it is:
Xiao Zha became American Zhang Yiming from American Li Yanhong.
In the past, the market has essentially been pricing Zuckerberg as the “American Li Yanhong”: the ads business is indeed awesome, and the cash flow is fine. But each year he pours so much money into AI, builds a bunch of models, yet on the product side he hasn’t come up with anything truly eye-catching. So giving you a PE of over twenty times also seems reasonable. The core business cash flow is still pretty solid, and for now AI is treated as a cost center.
But after MUSE came out, things changed. If it ultimately turns out that Xiao Zha isn’t American Li Yanhong, but American Zhang Yiming—then not only would he keep spending money on models, he could also truly operationalize tens of billions of users, the product, distribution, and commercialization. In that case, even a PE of 24 might still be pricing Meta according to the old script.
American Li Yanhong—24x is about right.
American Zhang Yiming—24x is too cheap 😂
Went in hard yesterday $META
Xiao Zha became American Zhang Yiming from American Li Yanhong.
In the past, the market has essentially been pricing Zuckerberg as the “American Li Yanhong”: the ads business is indeed awesome, and the cash flow is fine. But each year he pours so much money into AI, builds a bunch of models, yet on the product side he hasn’t come up with anything truly eye-catching. So giving you a PE of over twenty times also seems reasonable. The core business cash flow is still pretty solid, and for now AI is treated as a cost center.
But after MUSE came out, things changed. If it ultimately turns out that Xiao Zha isn’t American Li Yanhong, but American Zhang Yiming—then not only would he keep spending money on models, he could also truly operationalize tens of billions of users, the product, distribution, and commercialization. In that case, even a PE of 24 might still be pricing Meta according to the old script.
American Li Yanhong—24x is about right.
American Zhang Yiming—24x is too cheap 😂
Went in hard yesterday $META
