Meta Platforms, Inc.

Meta runs social apps like Facebook, Instagram, WhatsApp, and Messenger used by billions of people. It makes most of its money from advertising shown across these apps. WhatsApp is also adding paid messaging for businesses and subscriptions, creating new revenue streams. The company also develops virtual and augmented reality hardware and software under Reality Labs, which sells devices like Quest headsets.

Meta’s financial base is strong: it holds a large cash balance, modest debt, and generates significant cash even as it spends heavily to build AI infrastructure and data centers. 2025 showed solid revenue growth and strong profit per dollar of sales in the core apps, though one‑time legal and other charges weighed on reported results late in the year and expenses rose with AI hiring and infrastructure buildouts. The risk is that spending stays very high while ad pricing or volumes cool, or regulators force product changes that weaken targeting; Reality Labs’ ongoing losses also remain a drag. With a rich valuation (high P/E and EV/EBITDA), expectations are high, so we see a balanced risk/reward over 12 months: strong balance sheet limits downside, but heavy spending and regulatory risk temper upside.