Meta shares lost $135 billion in market capitalization over four sessions because of concerns about the company’s artificial intelligence spending. The company nevertheless has a $1.65 trillion market capitalization, generates $20 billion in revenue and trades below 7 times revenue, 20 times annual earnings and 17 times estimated 2027 earnings. Personal AI agent Muse could generate several billion dollars in revenue, according to Mike Khouw, who calculates a potential $4.3 billion with 1% of daily active users and $43.2 billion with 20% of them. This opportunity partially offsets risks linked to a $25 billion lawsuit in New Mexico, Meta’s commitments concerning founder taxes and the debt needed to fund artificial intelligence investments. To implement this thesis, Khouw favors selling a December 580/745 options strangle that would generate about $21.30 per share.
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