It was Facebook's AI moment.
CEO Mark Zuckerberg had a vision to take his social media empire into the next phase by being at the forefront of the Metaverse revolution.
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To show how serious he was about his vision, Zuckerberg renamed his trillion dollar company Meta Platforms (META) and then proceeded to spend tens of billions of dollars annually building his alternate universe.
After losing hundreds of billions in market cap, Evercore ISI Mark Mahaney thinks the company may be regretting its decision to rebrand.
When asked by CNBC whether changing the name to Meta was the wrong move, Mahaney said, "Yes, I actually think it was. And I think it's one of those things that they're going to regret. I think they already do regret it."
"I think investors told them that too because a lot of the market cap was taken out. A lot of people sold the stock last year for good reasons. But one was this excess focus on the metaverse. They should be investing in the metaverse, but maybe to the tune of $5 billion instead of $15 billion."
Earlier this year, Zuckerberg did signal that the company was going to refocus its efforts on its money-making advertising business, instead of its money-losing metaverse ambitions.
And Mahaney sees Meta as a solid buy as a result.
"It is the cheapest high quality tech stock out there, period. It has 14x GAAP earnings and it's got three product cycles it is going through," Mahaney says.
The three product cycles are Reels monetization, their click-to-message product, and the company has been able to regain some of the lost ad-signal ability it experienced once Apple changed its privacy settings.
"You're going to have a nice recovery in the revenue growth as you go through the year, and it has already started to accelerate faster than these any of these other ad platforms because of these product cycles," Mahaney said.
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