Core Viewpoint - Meta's aggressive capital expenditure plans, particularly in AI and infrastructure, may reshape its earnings profile unfavorably for investors despite strong revenue growth [1][2][3]. Financial Performance - Meta's third-quarter revenue grew by 26% year over year, driven by increased ad impressions and prices, while operating income also saw double-digit growth [2][6]. - The company reported capital expenditures of $39.2 billion for 2024, which was 7% of total revenue of $164.5 billion, up 22% year over year [4]. - In the third quarter of 2025, capital expenditures reached $19.4 billion, with free cash flow declining to $10.6 billion from $15.5 billion a year earlier [6]. Capital Expenditure Outlook - Management has raised its 2025 capital expenditures forecast to a range of $60 billion to $65 billion, later adjusting it to $66 billion to $72 billion, indicating an approximate 80% increase compared to 2024 [5][6]. - For 2026, capital expenditures could reach around $110 billion, nearly triple the 2024 level, as management anticipates significant growth in infrastructure costs [9][11]. Earnings and Valuation Implications - The shift towards a capital-intensive model may slow earnings growth as depreciation and amortization costs rise, impacting the company's operating margin, which was 42% for 2024 [10][11]. - Despite strong advertising revenue growth, the heavy capital expenditures and associated depreciation may challenge the current valuation, which assumes sustained robust profit growth [12][13].

Group 1: Analyst Ratings and Price Targets - Morgan Stanley analyst Matthew Cost maintained a Hold rating on Criteo S.A. with a price target of $36.00, reflecting a cautious view on the company's near-term prospects despite operational improvements [1] - Stifel reaffirmed its Buy rating with a target of $42.00, highlighting Criteo's strong position to benefit from the growing agentic commerce trend and the importance of access to scaled retailer data [2] - BMO Capital lowered its price target from $51.00 to $40.00 while maintaining an Outperform rating, noting that Criteo's Contribution ex TAC and Adjusted EBITDA were about 2.5% and 25% above consensus [3] Group 2: Financial Performance - Criteo's third quarter 2025 results showed adjusted EPS of $1.31, exceeding forecasts by over 40%, with revenue reaching $470 million, significantly above estimates [3] - The company has a free cash flow yield of 21% and more cash than debt, indicating solid financial health [2] Group 3: Company Overview - Criteo S.A. is a global technology company providing marketing and monetization services across the open internet, utilizing its Criteo Shopper Graph to enhance client campaigns [4] - The company operates in various regions including North America, South America, Europe, the Middle East, Africa, and Asia Pacific, strengthening its role in digital advertising and commerce solutions [4]

2 December 2025 | 4:02PM EST Equity Research AMERICAS TECHNOLOGY: INTERNET Holiday Season 2025: Takeaways from Cyber 5 for eCommerce & Digital Advertising On the back of the Cyber 5 shopping period, we analyzed datasets and conducted industry channel checks across both the eCommerce (including 3rd party sellers) and the Digital Advertising landscape. Our work points to a few conclusions: 1) the holiday shopping period is off to a solid start relative to industry forecasts (albeit with mixed trends among var ...

Core Insights - Deep-pocketed investors are showing a bullish sentiment towards Trade Desk (NASDAQ:TTD), indicating potential significant developments ahead [1] - The options activity for Trade Desk is unusually high, with a near-even split in sentiment among investors [2] Options Activity - A total of 13 extraordinary options activities were recorded for Trade Desk, with 46% of investors leaning bullish and 46% bearish [2] - Notable options include 5 puts totaling $292,135 and 8 calls amounting to $565,659 [2] Price Projections - Big players are targeting a price range for Trade Desk between $25.0 and $50.0 over the past quarter [3] Volume and Open Interest Analysis - An analysis of volume and open interest reveals key insights into liquidity and interest levels for Trade Desk's options within the $25.0 to $50.0 strike price range [4] Largest Options Trades - Significant trades include a bullish call sweep with a total trade price of $201.5K at a strike price of $47.50 [8] - A bearish put sweep with a total trade price of $106.6K at a strike price of $35.00 [8] - Other notable trades include a bearish call trade at a strike price of $40.00 and a bullish put trade at a strike price of $50.00 [8] Company Overview - Trade Desk operates a self-service platform for advertisers to programmatically purchase digital ad inventory across various devices, generating revenue from fees based on client advertising spend [10] Analyst Opinions - Recent insights from 5 industry analysts suggest an average target price of $68.2 for Trade Desk, with individual targets ranging from $54 to $82 [11][12] Current Market Position - Trade Desk's stock price is currently at $39.21, reflecting a 0.26% increase, with a trading volume of 3,912,174 [14]

Core Viewpoint - Alphabet (GOOG) is positioned to benefit significantly from the artificial intelligence revolution, with shares currently trading at a low valuation, making them a buy opportunity [1] Group 1: Company Overview - Alphabet owns valuable digital assets such as Google search, YouTube, Android, Gmail, and Google Cloud, with the majority of revenue coming from advertising [2] - As of November 25, shares increased by 20.5%, bringing the company's market capitalization close to $4 trillion [2] Group 2: Financial Performance - In Q3, Alphabet's revenue rose by 16% year-over-year to $102.3 billion, while operating income, excluding one-time charges, increased by 22% [3] - GOOG stock has a trailing price-earnings ratio of 31.4, with 44 out of 55 analysts rating it a "Strong Buy" [3] Group 3: AI Developments - Meta is reportedly considering purchasing AI chips from Alphabet, indicating high demand for GOOG's products, which are noted to be more cost-effective and power-efficient than Nvidia's GPUs [3][4] - Alphabet's latest AI model, Gemini 3, has received praise for its reasoning and coding capabilities, and its partnership with AI startup Anthropic is expected to enhance financial results in the long term [5]

Core Insights - The company has demonstrated solid growth across key areas, indicating a positive performance trend [1] - Despite the growth, investors are increasingly concerned about the rising competition risks affecting the company's market position [1] - The stock price of The Trade Desk has significantly declined in 2025, suggesting a need for positive developments to regain investor confidence [1]

Core Insights - AppLovin Corporation (APP) and Arm Holdings plc (ARM) are both positioned as leaders in the rapidly growing artificial intelligence sector, despite operating in different segments of the technology ecosystem [1][2] AppLovin Corporation (APP) - AppLovin is enhancing its advertising performance through advanced machine learning systems, focusing on app monetization and marketing automation [2] - The company is prioritizing improvements in advertiser onboarding, AI-based support tools, generative AI for ad creation, and marketing for its Axon Ads platform [3] - AppLovin is transitioning from a gaming-centric business to a more sophisticated digital advertising platform, utilizing machine learning to predict user behavior and optimize ad placements [4] - The company reported Q3 revenues of $1.41 billion, a 68% increase year-over-year, with adjusted EBITDA rising 79% to $1.16 billion, reflecting an 82% margin [6] - Free cash flow surged 92% to $1.05 billion, indicating strong cash generation capabilities [6] - AppLovin's MAX platform is experiencing growth due to rising advertiser demand and effective campaigns, solidifying its position in app-based advertising [7] - The company is projected to achieve 18% revenue growth and a 106% increase in earnings this year, showcasing significant operational leverage [14] Arm Holdings plc (ARM) - Arm Holdings is expanding its ecosystem and forming partnerships, such as with Meta, to enhance AI efficiency across various computing platforms [8] - The company is a key technology partner for major hyperscalers, with its designs contributing to improved energy efficiency and cost performance in chips [10] - Arm's Compute Subsystem (CSS) designs are streamlining chip development, reducing time-to-market and technical risks for manufacturers [11] - The Lumex CSS platform is set to power flagship devices from OPPO and vivo, enhancing mobile AI capabilities [12] - Arm reported Q2 revenues of $1.14 billion, a 34% year-over-year increase, with operating income rising 43% to achieve a 41.1% margin [13] - The company is projected to deliver 21.5% revenue growth but only a 5.5% increase in EPS, indicating a more gradual earnings expansion [17] Valuation Perspective - AppLovin trades at a forward P/E of 38.55x, slightly below its median, while Arm trades at 65.71x, reflecting high expectations for long-term AI and IoT opportunities [21] - AppLovin's stronger earnings growth and operational efficiency make its valuation more compelling compared to Arm [21] - Investors seeking near-term upside may find AppLovin to be a more attractive option, while Arm remains a strong long-term play in AI chip adoption [22]

Core Insights - Primis has achieved Open Measurement SDK Integration Validation Compliance from the IAB Tech Lab for the third consecutive year, confirming its commitment to transparency and ad quality in digital video [1][2][3] Company Overview - Primis is a leader in Video Discovery, enhancing publishers' revenue by facilitating user access to high-quality video content, reaching over 450 million unique users monthly [4] - The company is part of the McCann and IPG network, indicating strong backing and industry presence [4][5] Certification Significance - The certification verifies that Primis's video player meets the industry's strictest standards for ad viewability and impression measurement, promoting a trusted video experience for publishers, advertisers, and users [2][3] - This achievement reflects the company's dedication to building a safer and more transparent digital ecosystem [3] Additional Tools and Initiatives - Primis has developed Sellers.guide, a free tool for managing ads.txt files, aimed at promoting transparency and efficiency in programmatic advertising [5]

Core Insights - Taboola has partnered with BuzzFeed Asia to launch DeeperDive, a Gen AI answer engine designed to enhance user engagement and create new revenue streams for publishers [1][4][5] Group 1: Product Overview - DeeperDive integrates AI search capabilities directly on publisher websites, utilizing high-quality content from journalists to provide instant answers to user inquiries [2][7] - The service will initially be available in Singapore, Malaysia, and the Philippines, targeting key Southeast Asian markets [1] Group 2: User Engagement and Experience - The platform encourages users to ask questions and receive immediate, relevant answers, fostering a more interactive and engaging experience [3][7] - By offering multifaceted answers and links to related articles, DeeperDive aims to increase time spent on site and enhance reader loyalty [7] Group 3: Revenue Opportunities - DeeperDive presents a new monetization channel for publishers by allowing contextually relevant ads to be integrated into AI-generated results, capturing search-like advertising revenue [7] - This innovation positions publishers to leverage user inquiries as commercial opportunities while maintaining a seamless user experience [7]

Core Insights - The Trade Desk, Inc. (NASDAQ:TTD) is facing significant challenges, being described as one of the worst-performing stocks in the S&P 500 this year, primarily due to competition from Amazon [1][2] - Despite a 55% decline in stock value, there is a belief that TTD has potential, but the competitive landscape, particularly with Amazon, makes it a less attractive investment compared to other opportunities [2] Company Overview - The Trade Desk provides a cloud-based platform for advertisers to plan, manage, and measure digital ad campaigns across various formats and devices [2] Competitive Landscape - Amazon is identified as a major competitor to The Trade Desk, with its dominance in the market making it difficult for TTD to gain traction [1][2] - The preference for investing in Amazon over TTD is highlighted, indicating a strategic choice to avoid competition with hyperscalers like Amazon [1]