Meta Platforms does not yet have a rising Coppock Curve, but that will come. Meanwhile, everything else, great chart, great fundamentals, exciting story, iconic founder CEO, remains in place. I believe in Zuckerberg, that he is one of the epic entrepreneurs of his generation and a key player in the unfolding technology revolution.
This makes Meta Platforms a most appealing investment. A market value of $1.79T may seem substantial, but 10 years from now, Mega Caps could be at an entirely different level. One of those, you ain’t seen nothing yet moments. Meta Platforms has the footprint and the funding to make incredible things happen, and I expect it will.
Analysts endlessly sift through the tea leaves, but if ever there was a big picture stock, this is it. Forget the small print, let your imagination soar just like the group’s ambitious founder. You could almost say, as Jensen Huang of Nvidia probably would, that Meta Platforms is transforming into a giant virtual cloud era factory, energy and data in, valuable tokens spewing out in exponentially increasing quantities.
So what does Jensen Huang mean by tokens?
NVIDIA CEO Jensen Huang recently shared his insights on the future of artificial intelligence and its potential to revolutionize computing as we know it. Here is a transcript of his key remarks:
“The world has installed about a trillion dollars worth of data centers. General purpose computing has run its course — we cannot continue to process data that way. The world is going to accelerate everything — data processing, AI, you name it.
Every single data center and computer will become an accelerated server, powered by GPUs. Over the next 4–6 years, we’ll have to replace about $2 trillion worth of computers with accelerated computing.
This is an industrial revolution, because for the first time, we’re producing something entirely new at extremely high volume — floating point numbers, or tokens. These tokens have value because they represent artificial intelligence.
You can take these floating point numbers and reformulate them into language, proteins, chemicals, images, robotic controls — we’ve discovered how to produce tokens of almost any kind at extraordinary scale. The world is going to produce an enormous amount of these AI tokens.
These tokens will be produced in new types of data centers we call AI factories. Electrons go in, and floating point numbers come out. Just like how electricity was sold per kilowatt-hour in the last industrial revolution, now we’ll have millions of AI tokens per dollar.
This will enable new products, services and enhanced productivity across a hundred trillion dollars worth of industries. In order to monetize and transact in this token economy, you’re going to need tools like what Stripe provides.
This new AI industrial revolution, driven by floating point number tokens, will be as transformative and incomprehensible to many as the electricity revolution was. But within 10 years, it will become completely normal. The AI industry is going to be gigantic.”
Huang’s vision paints a picture of a future where AI is not just a part of computing, but the driving force behind a new kind of economy. He believes that the shift to accelerated computing and the mass production of AI “tokens” will be as transformative as the industrial revolution driven by electricity.
Medium, 13 June 2024
This is a perfect environment for Meta Platforms to flourish. Zuckerberg talks about the opportunities being created by AI.
The first opportunity is improved advertising. Our goal is to make it so that any business can basically tell us what objective they’re trying to achieve — like selling something or getting a new customer — and how much they’re willing to pay for each result, and then we just do the rest. Businesses used to have to generate their own ad creative and define what audiences they wanted to reach. But AI has already made us better at targeting and finding the audiences that will be interested in their product than many businesses are themselves, and that keeps improving. And now AI is generating better creative options for many businesses as well. I think that this is really redefining what advertising is into an AI agent that delivers measurable business results at scale. And if we deliver on this vision, then over the coming years I think that the increased productivity from AI will make advertising a meaningfully larger share of global GDP than it is today. In just the last quarter, we’re testing a new ads recommendation model for Reels, which has already increased conversion rates by 5%. And we’re seeing 30% more advertisers are using AI creative tools in the last quarter as well.
The second opportunity is more engaging experiences. This will come in two forms: better recommendations for existing content types, and better, new types of content. In the last six months, improvements to our recommendation systems have led to a 7% increase in time spent on Facebook, 6% increase on Instagram, and 35% on Threads. Threads now also has more than 350 million monthly actives and continues to be on track to become our next major social app. In addition to better recommendations for existing content types, AI is also enabling the creation of better content as well. Some of this will be helping people produce better content to share themselves. Some of this will be AI generating content directly for people that is personalized for them. Some of this will be in existing formats like photos and videos, and some of this will be increasingly interactive. I’ve often talked about this long term trend of content becoming richer over time. Our feeds started mostly with text, and then became mostly photos when we all got mobile phones with cameras, and then became mostly video when mobile networks became fast enough to handle that well. We’re now in the video era, but I don’t think that this is s the end of the line. In the near future I think we’re going to have content in our feeds that you can interact with and it’ll interact back with rather than you just watching it. Over the long term, as AI unlocks more productivity in the economy, I also expect that people will spend more of their time on entertainment and culture, which will create an even larger opportunity to create more engaging experiences across all of these apps.
The third opportunity is business messaging. Right now the vast majority of our business is advertising in feeds on Facebook and Instagram. But WhatsApp now has more than 3 billion monthly actives, with more than 100 million people in the US and growing quickly there. Messenger is also used by more than a billion people each month, and there are now as many messages sent each day on Instagram as there are on Messenger. Business messaging should be the next pillar of our business. In countries like Thailand and Vietnam where there is a low cost of labor, we see many businesses conduct commerce through our messaging apps. There is actually so much business through messaging that those countries are both in our top 10 or 11 by revenue even though they’re ranked in the 30s in global GDP. This phenomenon hasn’t yet spread to developed countries because the cost of labor is too high to make this a profitable model before AI — but AI should solve this. In the next few years, I expect that just like every business has an email address, social media account, and website, they’ll also have an AI business agent for customer support and sales. And they should be able to set that up very easily given all the context they’ve already put into our business platforms.The fourth opportunity is Meta AI. Across our apps, there are now almost a billion monthly actives using Meta AI. Our focus for this year is deepening the experience and making Meta AI the leading personal AI — with an emphasis on personalization, voice conversations, and entertainment. I think that we’re all going to have an AI that we talk to throughout the day — while we’re browsing content on our phones, and eventually as we’re going through our days with glasses — and I think this will be one of the most important and valuable services that has ever been created. In addition to building Meta AI into our apps, we just released our first Meta AI standalone app. It’s personalized so you can talk to it about interests you’ve shown while browsing Reels or different content across our apps. And we built a social feed so you can discover entertaining ways that others are using Meta AI, and initial feedback has been good so far. Over time, I expect the business opportunity for Meta AI to follow our normal product development playbook. First we build and scale a product, and then once it’s at scale then we focus on revenue. In this case, I think there will be a large opportunity to show product recommendations or ads, as well as a premium service for people who want to unlock more compute for additional functionality or intelligence. But I expect that we’re going to be largely focused on scaling and deepening engagement for at least the next year before we’ll really be ready to start building out the business here.
The fifth opportunity is AI devices, which is increasingly how we’re thinking about our work on the next generation of computing platforms. Glasses are the ideal form factor for both AI and the metaverse. They enable you to let an AI see what you see, hear what you hear, and talk to you throughout the day. And they let you blend the physical and digital worlds together with holograms. More than a billion people worldwide wear glasses today, and it seems highly likely that these will become AI glasses over the next 5 to 10 years. Building the devices that people use to experience our services lets us deliver the highest quality AI and social experiences. This will serve as an amplifier on all the opportunities I mentioned so far, as well as unlocking some new opportunities as well. Ray-Ban Meta AI glasses have tripled in sales in the last year and people who have them are using them a lot. We’ve got some exciting new launches with our partner EssilorLuxottica later this year as well that should expand that category and add some new technological capabilities to the glasses. On Quest, we’re also seeing deeper engagement as Quest 3S makes VR accessible to more people, and more people are creating experiences in Horizon with AI tools.
Mark Zuckerberg, CEO, Meta Platforms, Q1 2025, 30 April 2025
This is an exciting time for technology generally and Meta Platforms particularly.
More broadly, this has been a good start to what I expect will continue to be an intense year. We’ve got a lot more exciting work in the pipeline that I’m looking forward to sharing soon. I continue to think that this year is going to be a pivotal moment for our industry.
Mark Zuckerberg, CEO, Meta Platforms, Q1 2025, 30 April 2025
Mtea Platforms feels to me like a three-stage rocket heading into the stratosphere. Social media was stage one. Stage two is just beginning.
I haven’t put any buy signals on this chart. It is obvious that buying when Coppock turns higher from negative provides great opportunities. Buying when Coppock is falling but the chart looks positive is more about climbing aboard, shares in a company which is great 3G, key to the unfolding technology revolution and on the brink of joining the $1T plus market value club.
TSM is critical to the global technology industry, as Jensen Huiang, himself Taiwanese, frequently points out. Huang is putting Nvidia’s latest HQ building in Taiwan, so presumably he does not expect the Chinese to march in tomorrow.
TSMC is an extraordinary company.
Pioneered the dedicated semiconductor foundry business model, enabled fabless IC design industry to flourish and unleashed innovations with all Logic IC designers
Built the world’s largest semiconductor design ecosystem, Open Innovation Platform®, and collaborated with its customers/partners to form the most powerful force of semiconductor innovations – about 85% of worldwide semiconductor start-up product prototypes were enabled by TSMC
Produced 11,878 different products using 288 different process technologies to serve hundreds of customers with the world’s largest logic capacity of >16 million 12″-equivalent wafers in 2024
Enjoys a market share of 34% in “Foundry 2.0” industry, which TSMC defines as all logic wafer manufacturing, packaging, testing, mask-making and others, by unleashing customers’ innovations and nurturing customers’ success, which formed the foundation the Company’s future success
TSMC, website
The only foundry that consistently delivers excellent financial results. Delivered 18.2% revenue CAGR and 17.9% earnings CAGR since listing in 1994. Strategic financial objectives (2024 to 2029): (1) revenue CAGR to approach 20% in U.S. dollar terms; (2) gross margin to be 53% and higher and ROE to be above 25% through the cycle. Fortress balance sheet with semiconductor industry’s highest credit rating (S&P: AA-, Moody’s Aa3). Have relied only on internally generated funds to finance organic growth. Highly disciplined in mergers and acquisitions
TSMC, website
The globalisation of TSMC comes at a cost, but will still leave them by far the most profitable business in their industry.
We have just guided our second quarter gross margin to decrease by 80 basis points to 58% at the midpoint, primarily as the margin dilution impact from our Arizona fab starts to kick in. We expect the impact from overseas fab to grow more pronounced throughout the year, as we ramp up further in Kumamoto and Arizona and forecast 2% to 3% margin dilution impact for the full year 2025. As we have said before, under today’s fragmented globalization environment, overseas fab costs are higher for everyone, including TSMC and all other semiconductor manufacturers. With our additional $100 billion investment plan in Arizona, we forecast the gross margin dilution from the ramp-up of our overseas fabs in the next five years to start from 2% to 3% every year in the early stages and widened to 3% to 4% in the latter stages. We will leverage our increasing size in Arizona and work on our operations to improve the cost structure. We will also continue to work closely with our customers and suppliers to manage the impact. Overall, with our fundamental competitive advantages of manufacturing technology leadership and large-scale production base, we expect TSMC to be the most efficient and cost-effective manufacturer in the region that we operate. Thus, even considering our global manufacturing expansion plans, we believe a long-term gross margin of 53% and higher is achievable. Next, let me talk about our 2025 capital budget. At TSMC, a higher level of capital expenditures is always correlated with higher growth opportunities in the following years. We reiterate our 2025 capital budget is expected to be between USD38 billion and USD42 billion as we continue to invest to support customers’ growth. About 70% of the capital budget will be allocated for advanced process technologies. About 10% to 20% will be spent for specialty technologies and about 10% to 20% will be spent for advanced packaging, testing, mask-making and others. Our 2025 CapEx also includes a small amount related to our recently announced additional $100 billion investment plan to expand our capacity in Arizona. Even as we invest for the future growth with this level of CapEx spending in 2025, we remain committed to delivering profitable growth to our shareholders. We also remain committed to a sustainable and steadily increasing cash dividend per share on both an annual and quarterly basis.
Wendell Huang, CFO, TSMC, Q1 2025, 17 April 2025
Demand is strong.
Looking at the full year of 2025, we expect Foundry 2.0 industry growth to be supported by robust AI related demand and a mild recovery in other end market segments. In January, we had a forecast of Foundry 2.0 industry to grow [10%] (corrected by company after the call) year over year in 2025, which is consistent with the IDC’s forecast of 11% year over year growth for Foundry 2.0. We continue to observe robust AI related demand from our customers throughout 2025. We reaffirm our revenue from AI accelerators to double in 2025. The AI accelerators we define as AI GPU, AI ASIC, and HBM controllers for AI training and inference in the data center. Based on our customers’ strong demand, we are also working hard to double our CoWoS capacity in 2025 to support their needs. Recent developments are also positive to AI’s long-term demand outlook. In our assessment, the impact from reasoning models, including DeepSeek, will drive greater efficiency and help lower the barriers to future AI development. This will lead to wider usage and greater adoption of AI models, which all require use of leading-edge silicon. These developments will serve to strengthen our conviction in the long-term growth opportunities from the industry megatrend of 5G, AI and HPC.
To address the structural increase in the long-term market demand profile, TSMC employed a disciplined and thorough capacity planning system. This is especially important when we have such high forecasted demand from AI-related business. Externally, we work closely with our customers and our customers’ customers to plan our capacity. Internally, our planning system involves multiple teams across several functions to assess and evaluate the market demand, from both top-down and bottom-up approach, to determine the appropriate capacity to build. Based on our planning framework, we are confident that our revenue growth from AI accelerators will approach a mid-40s-percentage CAGR for the next five years period starting from 2024.
C.C. Wei, CEO, TSMC, Q1 2025, 17 April 2025
The move into US manufacturing is massive.
Next, let me talk about TSMC’s additional USD100 billion investment plan to expand in Arizona. All our overseas decisions are based on our customers’ need, as they value some geographic flexibility, and necessary level of government support. This is also to maximize the value for our shareholders. With a strong collaboration and support from our leading US customers and the US Federal, state, and city government, we recently announced our intention to invest an additional USD100 billion in advanced semiconductor manufacturing in the United States. This expansion includes plans for three additional wafer manufacturing fabs, two advanced packaging fabs, and a major R&D center. Combined with our previously announced plan to build three advanced semiconductor manufacturing fabs in Arizona, this brings our total investment in the US to USD165 billion to support the strong multi-year demand from our customers. Our first fab in Arizona has already successfully entered high-volume production in 4Q ‘24, utilizing N4 process technology, with a yield comparable to our fabs in Taiwan. The construction of our second fab, which will utilize the 3-nanometer process technologies, is already complete, and we are working on speeding up the volume production schedule, based on the strong AI-related demand from our customers. Our third and fourth fab will utilize N2 and A16 process technologies, and with the expectation of receiving all the necessary permits, is scheduled to begin construction later this year. Our fifth and sixth fab will use even more advanced technologies. The construction and ramp schedule for this fab will be based on our customers’ demand. We also plan to build two new advanced packaging facilities and an R&D center in Arizona to complete the AI supply chain. Our expansion plan will enable TSMC to scale up to a GIGAFAB cluster, to support the needs of our leading-edge customers in smartphone, AI, and HPC applications.
C.C. Wei, CEO, TSMC, Q1 2025, 17 April 2025
Share Recommendations
Meta Platforms. META
Taiwan Semiconductor Manufacturing Company TSM
Strategy – Buy Amazing Eighteen Shares
It’s not rocket science. I am trying to choose shares in super exciting companies and one exciting ETF. Use this information to help you make portfolio choices. These shares will be volatile. Don’t be phased by that; remember those rock-solid, super-exciting fundamentals. By all means, stagger your buying, but whatever you do, I believe these shares will deliver exciting gains over time. Many have done well already since I first began building this focused portfolio.
