Travis Hoium

If you spend this much money, then we're going to start valuing you respectively.

You don't generate as much cash flow.

The free cash flow there is going to be muted.

The question then becomes how long, how protracted is this capex cycle?

It has to stop at some point, but I do feel like it's a catch-22 because the moment the spending stops, the market rally does too.

You've hit the nail on the head there, which is to say virtually 100% of Meta's revenue comes from ads.

When you talk about Meta investing in AI or CapEx or whatever it may be, the only thing they care about is driving engagement to keep ad dollars on their platform.

They care about advertisers.

They care about spending.

In order to get advertisers and spending on their platforms, they need your eyes on their platforms as well.

So that is a comparatively different, I shouldn't say lower bar, I wanted to say lower, it's a different bar to hurdle as opposed to Microsoft, which clearly has a lot more balls to juggle, a lot more optionality, I think, in their court as well.

They're a little less of a single trick pony here.

But in the case of Meta, the best thing about this company is because they do such a great job maintaining engagement, we've seen Zuckerberg over the course of the past decade or so spend billions and billions of dollars, in my opinion, really ineffectively trying to make the metaverse a reality.

The metaverse, I think, is an unadulterated failure as it exists today.

And that hasn't stopped the full speed ahead train that is engagement on Meta's platform.

I mean, Instagram has been incredible for them.

The transition to Reels and ad spending on that platform, absolutely incredible.

Meta has a lot of room to run.

They can just throw stuff at the wall, the spending, and just see what sticks because they have this platform that still generates such incredible levels of engagement.

No, that was mind-blowing to me.