Meta has a Fantastic business but cash flow is under pressure. Its free cash flow plunged about 91% year over year because almost all excess cash is being reinvested.
Investors are very concerned about their scale of AI investment. However, my view is that Meta is strong company not weak. It’s takes time to materialise their returns for the investment.
Other the other hand, Microsoft is able to manage its cashflow better. Its execution is better and inline with the income generated, overall lower execution. Overall I see AI trade is absolutely fine. Can be justified 😁.
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