Ackman's Meta Bet Contrasts DeepValue Caution as Stock Dips Despite Growth Forecast

What happened

Meta's stock has declined to near $640, erasing prior gains, even as the company forecasts 30% revenue growth for next quarter—a level not achieved since 2021. Billionaire Bill Ackman is reportedly buying shares, highlighting bullish sentiment amid the sell-off. The DeepValue master report rates Meta a 'WAIT' with a $600 attractive entry, cautioning that current prices overestimate AI ad benefits while underestimating near-term EU consent changes and high capex risks. Key concerns include the Q1 2026 rollout of EU 'Less Personalized Ads', which could dent European revenue, and 2026 capex guidance of $115B-$135B that must not exceed thresholds to maintain operating income growth. Investors face a tension between Ackman's optimism and the report's call for patience until Q1-Q2 proof points validate ad resilience and spending discipline.

Implication

The stock's decline despite strong revenue guidance signals market doubt over Meta's ability to sustain growth amid rising costs and regulatory pressures, underscoring the need for cautious positioning. Bill Ackman's investment may offer short-term sentiment support but fails to address operational proofs required for long-term confidence, such as ad auction health during EU changes. Monitoring Q1 2026 revenue against the $53.5B-$56.5B range is essential to confirm if AI-driven monetization can offset escalating infrastructure spend, with early signs of degradation posing downside risk. Additionally, capex tracking above $135B or adverse legal outcomes from 2026 trials could trigger valuation compression, making proactive risk management critical. Thus, maintaining a wait-and-see approach allows investors to avoid premature exposure while gathering evidence on Meta's ability to navigate these cross-currents.

Thesis delta

The DeepValue report's thesis remains unchanged: wait for operational proof points from Q1-Q2 2026 before investing, due to unmitigated risks from EU consent changes and high capex. Bill Ackman's bullish move introduces a contrarian view but does not alter the fundamental risk profile, as it lacks evidence on ad resilience or spending containment. Investors should treat this external validation as a sentiment indicator rather than a shift in the investment case, emphasizing the need for data-driven confirmation over speculative optimism.