Why This Wealth Manager is Still Bullish on Meta Amid Regulatory Headwinds and Tariff Concerns

Meta Platforms (META) has faced a gauntlet of challenges in recent months: tariffs threatening its advertising business, an antitrust lawsuit that could break up the company, and a 5% year-to-date stock decline. Yet Stephanie Link, a portfolio manager at Hightower Advisors, remains defiantly bullish. “The core business is firing on all cylinders, and the valuation is absurdly cheap for a company of this scale,” she argues. Here’s why her optimism holds water—and why investors shouldn’t ignore it.

The Bull Case: A Fortress Balance Sheet and Scale That Defies Gravity

At its core, Meta’s business is a money-printing machine. The company’s “Family of Apps”—Facebook, Instagram, WhatsApp—generated $40.89 billion in Q1 revenue, with 3.33 billion daily active users underpinning its dominance. Even as advertisers in China and Asia Pacific face tariffs, Link points to Meta’s 13x EBITDA multiple as a buffer. “You’re paying less than half the S&P 500’s average multiple for a company with global monopolies in social media and AR/VR,” she says.

The numbers back her up. Despite the 5% YTD dip, Meta’s stock has risen 28% over the past 12 months, outperforming the S&P 500’s flat trajectory. And while Reality Labs continues to bleed cash—$4.55 billion in Q1 operating losses—the division’s long-term vision remains intact. As Link notes, “You don’t invest in Meta for its AR/VR business today. You invest for when it becomes the next Facebook.”

Navigating the Storm: Tariffs, Lawsuits, and the China Problem

The risks are real. President Trump’s tariffs on goods over $800—including many products advertised on Meta’s platforms—could crimp APAC ad revenue. Meanwhile, the FTC’s antitrust lawsuit seeks to dissolve Meta into its constituent apps, a move Link calls “a political play with little legal merit.”

Yet Meta’s response has been strategic. Settling a $25 million lawsuit with Trump and donating to his 2025 inauguration fund signals a shrewd alignment with the administration. And while China-based advertisers may account for 10% of Meta’s ad revenue, the company is already pivoting. As CEO Mark Zuckerberg noted in April, Meta’s AI-driven ad targeting tools have boosted efficiency by 6.36% year-over-year, offsetting some regional headwinds.

The Contrarian Play: Valuation and Volatility

Link’s contrarian edge lies in her focus on downside protection. With Meta’s shares trading at $400 (down from a 52-week high of $460), the stock offers a margin of safety. “If you’re wrong on Reality Labs, the core business still generates enough cash to keep investors whole,” she says.

The math is stark: Meta’s Q1 operating margin of 37.4% is nearly double that of Google’s parent Alphabet, and its user base dwarfs competitors. Even if Reality Labs never turns a profit, its $59 billion capital expenditure plan for 2025 represents a 14% annual investment in innovation, a figure that could pay dividends in the metaverse race.

Conclusion: A Buy at These Levels, Despite the Noise

Meta’s bullish case hinges on two unassailable truths: scale and valuation. With 3.33 billion daily users and a fortress balance sheet, the company can weather regulatory storms and tariff headwinds. The stock’s 13x EBITDA multiple is a screaming buy signal for a company growing ad revenue at 40–42% operating margins, per Link’s estimates.

Even the FTC’s lawsuit is a double-edged sword. A forced breakup could unlock shareholder value, as antitrust actions often do, while the $1 billion settlement offer Meta made underscores its willingness to mitigate risks.

In the end, the skeptics are right to worry about Meta’s reliance on ads and its bleeding-edge bets. But as Link concludes, “You don’t get paid for taking no risk. And at these prices, Meta’s risks are already priced in.” With $15.52 billion in Q1 operating income and a user base that grows by millions daily, this remains a stock worth owning—even if the path forward is bumpy.