Meta’s Muse Suite Rollout Makes The Recent Pullback A Buying Opportunity

The post Meta’s Muse Suite Rollout Makes the Recent Pullback a Buying Opportunity appeared first on 24/7 Wall St..

I have bought shares of Meta Platforms (NASDAQ:META) again and again, and the latest drop gave me another reason to do it. The stock closed at $620.19 on October 27, down 17.49% over the past month. So I added more.

Why I Keep Coming Back to Meta

Meta reaches 3.64 billion people every day, and advertisers keep paying more to reach them. In the third quarter, ad revenue came in at $63.06 billion, up 26%. Ad impressions grew 10%, and the average price per ad rose 14%. The pricing number matters most to me. It tells me AI keeps making Meta’s ads work better for the businesses that buy them.

Muse Is Already Making Sales

Muse, the personal agent built on Meta’s first frontier model, picked up more than 10 million users in the U.S. and Canada in about one and a half months. About 25% of them use it on any given day. More than 25% use it to shop, with an average purchase of over $200. The CEO laid out the plan simply: “For most people, the product should be free, and we will build commerce tools so we get paid a fee based on the transactions that we help facilitate.” Management also expects to improve Muse’s compute cost efficiency by more than 10x in the next year.

Q3’s EPS Miss Came Down to a Legal Bill

GAAP EPS of $3.83 fell short of the $5.70 consensus because of a $9.89 billion settlement charge. Without that charge, EPS would have been $7.40. Revenue of $64.60 billion beat estimates, and guidance for Q4 revenue is $73 billion to $76 billion. I pay about 23 times earnings for a 30.24% return on equity and 71.5x interest coverage.

Why My Money Skips Alphabet and Snap

Alphabet (NASDAQ:GOOGL) looks cheaper at about 14 times earnings. But a $99.03 billion gain on equity securities padded its Q2 net income. Alphabet’s free cash flow multiple is 52.88, compared with 29.66 for Meta. Alphabet also suspended buybacks, and its long-term debt rose from $46.5 billion to $98.2 billion.

Snap (NYSE:SNAP) grew ad revenue just 9% in Q2, still runs a negative operating margin, and owes 2.06 in debt for every dollar of equity. Meta’s ratio is 0.386.

Risks That Could Hurt This Position

Meta faces $18.59 billion in youth mental health litigation exposure, with more trials coming. Capex guidance of $135 billion to $145 billion turned Q3 free cash flow negative at -$2.12 billion. The infrastructure behind that spending has to be powered and cooled by somebody, which is the whole basis of a free report we put together on seven AI infrastructure suppliers that aren’t the chipmakers everyone already owns. The new nonvoting share class, which starts trading in late January 2027, gives Meta a way to raise capital, and that could reduce my stake.

I take those risks seriously. Still, Q3 operating cash flow reached $32.79 billion, up 9.29%, and 2025 free cash flow was $43.59 billion. Reality Labs losses should also narrow to about $15 billion in 2027. A business producing that much cash can carry a heavy spending cycle.

What Keeps Me Buying From Here

Management expects strong revenue growth to continue through 2027, and Muse comes to Meta Glasses in November 2026. Over ten years the stock has gained 376.81%, and it got there through plenty of selloffs like this one. When Meta’s price drops but the business keeps getting stronger, I keep buying.

The post Meta’s Muse Suite Rollout Makes the Recent Pullback a Buying Opportunity appeared first on 24/7 Wall St..