Meta Is Quietly Building a New Moat: Is META Stock A Buy Now?

Core Business Performance - Meta Platforms' total revenue for Q4 reached $59.9 billion, marking a 24% year-over-year increase, with Family of Apps revenue rising 25% to $58.9 billion [3] - Advertising revenue increased by 24% to $58.1 billion, driven by an 18% rise in ad impressions due to improved ad performance and advertiser demand [3] Reality Labs Segment - The Reality Labs segment experienced a revenue decline of 12% year-over-year to $955 million, with an operating loss of $6 billion attributed to prior-year product launch comparisons and timing of headset procurement [4] - Meta anticipates that Reality Labs' losses in 2026 will be similar to those in 2025, indicating a peak before a steady turnaround, with AI glasses viewed as a significant long-term opportunity [4] Financial Metrics - Earnings per share (EPS) increased by 11% year-over-year to $8.88 in Q4, while full-year revenue rose 22% to $200.9 billion, although EPS dipped 2% to $23.49 [5] - Capital expenditures totaled $22.1 billion, reflecting investments in data centers and infrastructure, with the company generating $14.1 billion in free cash flow and ending the quarter with $81.6 billion in cash and marketable securities, alongside $58.7 billion in debt [5] Strategic Positioning - Meta is evolving beyond social media by investing heavily in artificial intelligence, infrastructure, and new products, which are expected to strengthen its competitive position for the future [1] - The company has developed a new moat that combines AI, scale, data, infrastructure, and distribution, making it challenging for competitors to replicate [6]