TIVP056: META (META): IS META UNDERVALUED AGAIN?

W/ DANIEL MAHNCKE & SHAWN O’MALLEY

TIVP056: META (META): IS META UNDERVALUED AGAIN? W/ DANIEL MAHNCKE & SHAWN O’MALLEY

25 January 2026

Daniel Mahncke and Shawn O’Malley take a deep dive into Meta — the world’s most powerful attention engine, spanning Facebook, Instagram, WhatsApp, and Messenger, and still driven primarily by advertising. They break down how Meta’s “Family of Apps” keeps compounding through better AI-driven content discovery and ad targeting, while new surfaces like Reels, Threads, and WhatsApp monetization expand inventory and improve the long-term revenue mix. 

The episode also tackles the other half of the story: Reality Labs and the long-dated bet on AR/VR and wearables, how to think about the losses, what would need to be true for the investment to pay off, and which risks (regulation, competition, and capex intensity) matter most.

Join Daniel Mahncke and Shawn O’Malley as they assess whether Meta can keep widening the gap in digital advertising and whether the current valuation properly reflects both the AI upside and the metaverse-sized uncertainty.

SUBSCRIBE

IN THIS EPISODE, YOU’LL LEARN:

  • How much money the Metaverse failure cost
  • How AR glasses could replace smartphones
  • Why Reality Labs will likely yield average returns at best
  • What AI efforts Meta is implementing
  • Why Meta’s AI projects are not as bad as investors think
  • How the ad engine works
  • How WhatsApp and AI content could benefit Meta
  • Whether Shawn and Daniel add Meta to the portfolio
  • And much, much more!

Disclosure: This episode and the resources on this page are for informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. For full disclosures, see link.

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Daniel Mahncke: Meta is going to spend a hundred billion dollars on AI investments next year. And when I started my research, I was skeptical. What are they spending a hundred billion dollars on? Llama is way behind ChatGPT or Gemini and is a more efficient ad engine actually worth hundreds of billions of dollars in investments.

[00:00:18] Shawn O’Malley: Well, the market seems to think that Meta won’t see stellar returns from this, and the stock is trading at a huge discount to other Mag 7 companies and it’s already dropped double digits on this investment announcement.

[00:00:30] Daniel Mahncke: But this might be a chance. I mean, Llama is not Meta’s AI story. Ads have already massively improved thanks to AI, and Meta is billing a much bigger ecosystem in the background that could make it one of the biggest AI winners.

[00:00:42] Daniel Mahncke: After all, let me explain.

[00:00:48] Intro: You are listening to The Intrinsic Value Podcast by The Investor’s Podcast Network. Since 2014, with over 180 million downloads. We’ve learned directly from the world’s best investors. Now we are applying those lessons to analyze businesses and investment opportunities every week, helping you uncover intrinsic value. And now here are your hosts, Shawn O’Malley and Daniel Mahncke.

[00:01:20] Shawn O’Malley: Today marks the 56th episode of The Intrinsic Value Podcast. That means we have looked at over a year’s worth of companies at a weekly cadence. I am kind of proud that this is only the third time. We’ve covered a Magnificent 7 company. We covered Google and Amazon before, and while we did pass on Amazon, we invested in Google and that was actually one of our biggest winners last year.

[00:01:43] Shawn O’Malley: And today we will look at a company that was dramatically sold off in 2022 and since then has returned about 600% and yet the stock is down double digits from its all time highs again. And with a forward PE of just 22 times, it is the cheapest Mag 7 name out there. And in fact, it’s trading at a lower forward PE than the broader S&P 500.

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