Meta Shines as Warren Buffett's Next Big Buy
Warren Buffett's investment strategy is often studied and emulated by investors, but what would he do if faced with three tech giants: Apple (AAPL), Meta Platforms (META), and Microsoft (MSFT)? According to one analysis, a Buffett-style investor would likely focus on Meta at its current price of $556.71.
The reasoning behind this choice is that Meta's stock has declined 15.52% year-to-date, while the business continues to compound at scale, a pattern that Berkshire Hathaway has historically targeted for investment opportunities.
Meta owns the largest advertising franchise on the internet, with 3.60 billion daily active users across its family of apps and $59.36 billion in quarterly ad revenue growing 27% year-over-year. While the current price may reflect market concerns about a recent EPS miss and increased capital expenditures to $130-$145 billion, analysts argue that this presents an attractive buying opportunity.
The stock trades at a trailing P/E of 21 and a forward P/E of 19, with a PEG ratio of 0.831, which is considered a franchise multiple for a business with such strong growth prospects.