After listening to the $META earnings call, it’s clear that the company is in an investing cycle which will increase margin pressure next year. A big chunk is the experimental bet on the metaverse, but Meta also invests heavily in AI to improve its recommendation engine.

Despite macro pressures, the core products are doing fine. The new Reels format sees good engagement and shows early signs of high monetization potential. Meta has pulled off similar transformations in the past, for example with the Stories feature.

Expenses will remain high for the time being. For some bets, management doesn’t yet know when and to what degree they will work out. Holding $META stocks will thus require patience and time for all issues to be resolved.