In October 2023, I published an article on this site urging you to buy Meta Platforms (NASDAQ:META) ahead of earnings. My thesis: Zuckerberg’s Year of Efficiency combined with AI’s impact on advertising would create explosive returns. If you bought that day at $295.89, you’re sitting on a 120% return today at $651.72.

Betting on Mark Zuckerberg

META dominates my portfolio because of Mark Zuckerberg himself. He loves to win, but more importantly, he hates to lose. That competitive fire translates directly into shareholder returns. As he said on the Q3 earnings call: “I am very focused on establishing Meta as the leading frontier AI lab. Building personal superintelligence for everyone and delivering the app experiences and computing devices that will improve the lives of billions of people around the world.”

When META announced plans to cut metaverse spending by up to 30%, the stock jumped 5% pre-market. The market rewarded Zuckerberg’s capital discipline, the same discipline that drove 2023’s Year of Efficiency. He’s willing to kill his own projects when they don’t deliver.

The Real AI Battle Nobody’s Watching

Everyone obsesses over ChatGPT versus Google versus Meta AI for chat interfaces. That’s noise. The real AI battle is passive content consumption and advertising. META has 3.54 billion daily active people across its family of apps. Every 1% improvement in content relevance or ad targeting has massive impact few companies can match.

Zuckerberg explained it perfectly: “Social media has gone through two eras so far. First, was when all content was from friends, family, and accounts that you followed directly. The second was when we added all of the creator content. Now, as AI makes it easier to create and remix content, we’re going to add yet another huge corpus of content on top of those.”

The results are already showing: 5% more time spent on Facebook, 10% on Threads, and video time on Instagram up over 30% year-over-year. Reels alone now has a $50 billion annual run rate. These aren’t projections; they’re current numbers driven by AI recommendation systems.

The Financial Fortress

META generated $30 billion in operating cash flow in Q3, up 21% year-over-year, with a 40.1% operating margin and 30.9% profit margin. This fortress balance sheet gives Zuckerberg room to make major bets and be wrong for a decade. Reality Labs has burned billions, but his Instagram and WhatsApp acquisitions generated extraordinary returns.

Remember 2012? Facebook bought Instagram for $1 billion. The Guardian’s headline read: “Facebook buys Instagram for $1bn and everyone hates it already.” Critics called it overpriced and desperate. Today, Instagram alone is worth over $100 billion. WhatsApp faced similar criticism at $19 billion in 2014. Both acquisitions now look like genius.

Positioned for the AI Fallout

AI is real and transformative, bigger than the internet itself. But hype cycles create fallout, and that’s when META will strike. With $44.5 billion in cash and massive free cash flow, Zuckerberg will acquire companies, technologies, and talent on the cheap during AI winter periods. He’s done it before with Instagram and WhatsApp. He’ll do it again.

That’s why META isn’t just my largest position. It’s my conviction bet on the next decade of technology.