Chung has been complaining, half seriously, that his Facebook feed is now mostly ads, and turns that into an investment thesis. His concern is that Meta's AI spending is not obviously buying it a second business the way Google's buys cloud and search. Asked next about valuation, he says owning Meta is largely a bet on Zuckerberg himself.
…I do look at Instagram too. I looked at Facebook and I realized, you know what? Everything that I'm looking at and scrolling through, about 85% of it is not from my friends anymore. They're ads. Now, I did marvel that some of them are really good ads because it's like, yep, I like skiing. So it
knows this very well.
You know, yeah. So show me some skiing ads right now. And yes, I made the mistake, I guess, somewhere of looking for a mountain bike. And so show me some mountain bike ads. But I do think that Meta has a little bit more of an existential risk than, say, Google does, for example, in that other than the advertising business, they've not been successful in any subscription-based businesses, really. And I think they're actually behind in AI, although I know the Lisa Lama catch up was impressive. But I mean, that's where I'm a little bit worried about the spending there relative to what I see as future businesses. Google, I should note, in addition to YouTube, right, search, of course, and the cloud, they also have Waymo. And autonomous driving at Waymo is incredible. I mean, it's here. They need to reduce the cost of it, but I can definitely see autonomous driving as becoming a, you know, the next obvious thing for all of us within five years.
I have a question on how you think about, and last question. How you guys think about price relative to value? And let's stick with Meta as an example. So Meta is trading at, I don't know, 15 times forward earnings, whatever it is. And the market is obviously agreeing with your skepticism. And…
Yeah, so Meta is a company that I have to admit, it has kind of a bigger you're betting a lot on Mark Zuckerberg here, right? You're betting that his leadership, his willingness to just basically throw a ton of money at AI, is going to pay off for Meta the way it does for others. But as I've, as…
I hope not.