Meta Platforms’ (META) Strong Growth Backdrop Highlights Valuation Disconnect

Pershing Square Holdings, a major investment firm, revealed its second quarter 2026 outlook in an investor letter obtained by our team. The letter centers on Meta Platforms, Inc., the parent company of major social media networks and a key player in the AI technology space. In its quarterly report, Pershing Square noted that Meta's stock has faced challenges due to increased operating costs and investments in AI development.

However, the company is poised to capitalize on the growing demand for AI-driven services, which are driving higher engagement, more effective ad targeting, and innovative product offerings. Despite a 15% year-to-date decline from its current $568.97 share price, Pershing Square sees Meta as a "highly discounted valuation" for a dominant internet platform with 3.6 billion daily active users.

With a forward earnings multiple of 18 times, the company is expected to achieve earnings growth of over 20% in the coming years. While the report acknowledges the potential of other AI stocks, Pershing Square believes Meta's strong position in the market makes it an attractive investment opportunity.