To The Moon

Meta Platforms isn’t just sitting at the top of the tech heap—it’s perched up there with a $1.76 trillion crown and a $700+ share price that’s beginning to feel more like a psychological ceiling than a growth story. While headlines circle around artificial intelligence and metaverse ambition, there’s a more practical catalyst quietly building: a long-overdue stock split. But I believe the real story here isn’t the split itself. It’s what it could signal.

Meta’s $700 ceiling: a number, a message, a moment

The war chest that lets Meta bet on everything—maybe too much

At the end of March, Meta held over $70 billion in cash, equivalents, and marketable securities—more than the GDP of Luxembourg. With nearly $100 billion in annual operating cash flow and a modest 26.76% debt-to-equity ratio, $Meta Platforms, Inc.(META)$ has the luxury of optionality. It can fund AI infrastructure, chase metaverse dreams, and still buy back stock or pay a dividend—all without flinching.

That flexibility, though, has a flip side. Meta’s relentless metaverse push via Reality Labs has already cost shareholders $13.7 billion in operating losses for 2023 alone, with no clear path to commercialisation. While the cash cushion easily absorbs this for now, there’s a legitimate question as to whether this is strategic foresight or just expensive experimentation. Zuckerberg may see it as the “next computing platform,” but in the meantime, it’s mostly just a very costly R&D line item.

A stock split: not retail bait, but a broader signal

With shares recently hovering just above $700 and brushing highs of nearly $750, Meta is now the most expensive stock in the Magnificent Seven—at least in nominal terms. A forward split feels overdue, but I’m not convinced it will meaningfully boost retail participation. Most brokerages already offer fractional shares, and 27% of Meta’s stock is already in everyday hands.

And the chart below suggests there’s still breathing room before Meta’s next overbought wobble.

Instead, I see the split as more symbolic—an indicator that $Meta Platforms, Inc.(META)$ may be entering a new phase in its lifecycle: one where it behaves a little more like a mature platform business. That could mean more consistent capital return, a shift in investor communication, and potentially greater internal discipline. The 0.28% dividend yield barely registers, but with such strong free cash flow, there’s little excuse not to raise it.

Valuation still makes sense—but AI optimism may be baked in

At first glance, Meta’s valuation still looks grounded. The stock trades at 25 times forward earnings, despite 39% profit margins, 35% earnings growth, and a nearly 18% return on assets. But let’s not kid ourselves: after a 340% share price surge over the past three years, some of the AI upside has already been priced in.

Against its Big Tech peers, Meta looks fairly priced—positioned for steady, not euphoric, expectations

Yes, there’s more room for operating leverage as AI tools improve efficiency and ad personalisation. But the PEG ratio of 2.32 suggests expectations are high, and multiple expansion could struggle to continue unless Meta either materially grows earnings or stumbles into a breakthrough product. This isn’t 2018 Meta—it’s a heavyweight now, and heavyweights grow more slowly.

Advertising dominance: stable or single-point failure?

Advertising remains the engine—98% of total revenue, to be precise. Meta’s grip on the digital ad world is unmatched, with daily active users across its family of apps averaging 3.43 billion in March. Advertisers still pay a premium for scale, and Meta delivers it better than anyone else.

But that dominance brings risk. When 98% of your revenue relies on one stream, you’re exposed to any macro disruption in spending patterns. Sure, the company’s global footprint gives it resilience—but digital ad spend is notoriously cyclical, and even short, sharp recessions can hit revenues fast. AI may help buffer this by boosting ad performance and return on investment, but it doesn’t eliminate the dependency.

One underappreciated risk is the slow erosion of user attention. Younger demographics are splintering across platforms, and regulatory pressure on personalised ad targeting isn’t going away. $Meta Platforms, Inc.(META)$ is monetising WhatsApp and experimenting with subscriptions, but these are early innings, not safety nets.

When your R&D dreams sit on $70 billion foundations

Meta still leads, but the easy gains may be behind us

A stock split won’t change Meta’s fundamentals, but it may reflect an internal recognition that the company is evolving. It’s no longer the social upstart or the misunderstood metaverse experimenter. It’s an earnings machine—with real-world risks, lofty expectations, and one eye on the future.

If you’re buying now, it’s not because you think a 10-for-1 split will juice retail flows. It’s because you believe Meta’s position in digital ads, AI infrastructure, and consumer platforms is sustainable—and that the company can walk the tightrope of investing in the future without undermining its present.

I still like Meta here. But I’m realistic. The valuation isn’t dirt cheap, the AI hype has legs but also limits, and the metaverse remains a leap of faith. For now, I’ll keep watching how Meta balances the bold with the boring. It’s easy to build castles in the cloud when you’ve got $70 billion in cash. The trick is turning them into cash-generating kingdoms.

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