Meta Q1 Preview: Anticipating Deceleration Due To Chinese Advertisers
Summary
- I am downgrading Meta Platforms, Inc. to a Hold rating with a fair value of $568 per share due to anticipated revenue deceleration from Chinese advertisers.
- Meta faces near-term challenges from reduced digital ad spending by Chinese e-commerce giants and potential impacts from new U.S. trade policies.
- Heavy CAPEX and R&D investments may not yield significant returns as AI models become commoditized, impacting Meta's operating margins and free cash flow.
- Despite near-term pressures, Meta's AI technology and long-term growth prospects remain strong, but current economic uncertainties necessitate a cautious outlook.
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