During the September 3 episode of Mad Money, host Jim Cramer said Meta Platforms, Inc. (NASDAQ:META) had become “a hated stock,” as he said:
Next, okay, here’s one. Maybe the cheapest of all. I’m going to walk you through this one. It’s a hated stock, but I’m going to walk you through it. It’s called Meta Platforms. I’m going to call it Facebook from now on, or maybe Insta because people are sick of this Meta name. Last week, this company settled a gigantic lawsuit involving teen abuse that was brought by… state attorneys general who basically want to crush this company. I know that most, if not almost every single person in the media acted as if this settlement was a big win for the authorities against Meta. Those people are wrong.
I could not disagree more with them. They settled for… $18 billion. It could have been less. And they have 10 years to pay it. That’s a very small amount of money for this giant company. They make so much money. This teen abuse lawsuit could have been an existential threat to Meta. I was worried they may have to fork over $100 billion. I actually thought that was going to be the number. And then I thought there would be hundreds of thousands of individual lawsuits filed in its wake. I think the settlement takes off the table what I thought was the existential threat. I am saying it was a huge win for Meta.
Is that a reason to buy? Well, wait a second. Meta’s the best advertising medium in history. I think WhatsApp could be the most undervalued asset of all time, and the stock’s down 7% for the year. You’re getting the smartest team who knows how to win for next to nothing. Meta is trading at 19.5 times earnings. These are all below the market multiple, and they’re so good. Just watch. The iconic Dina Powell McCormick, president of Meta, is going to show this nation why you want to own a data center. You want it in your own town. They’ll offer your town lower prices for everything and perhaps place a junior college next to the data center to teach people trades that will be there after the data center opens and all the other people have left permanent employment. They’ll rent out their voluminous compute and make shareholders fortunes. Meta, it’s at the price.
Advertising Business Remains the Core of Meta’s Earnings
Meta Platforms, Inc.’s Family of Apps segment, which includes Facebook, Instagram and WhatsApp, generated the majority of the company’s revenue in the second quarter of 2026. Total company revenue was $60.8 billion, up 28% year over year, driven by advertising revenue growth. Ad impressions across the Family of Apps increased 14%, while average price per ad increased 12%. The company has increased investment in artificial intelligence infrastructure and products. CEO Mark Zuckerberg said during the company’s second-quarter earnings call that:
AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities.
Zuckerberg also said the company is pursuing several AI-related opportunities, including improving its core business, developing consumer products, building enterprise tools and potentially selling compute directly to customers.
AI Spending Remains an Investor Concern
Investors have focused on whether Meta Platforms, Inc.’s AI investments will generate returns that justify the scale of spending. The company expects 2026 capital expenditures of approximately $130 billion to $145 billion as it invests in AI efforts and its core business. It reported second-quarter costs and expenses of $42 billion, up 55% year over year. Meta said the increase was driven primarily by higher employee compensation, infrastructure expenses related to data centers and technical infrastructure, legal-related costs and third-party AI token costs.
Additionally, operating income declined 8% year over year to $18.8 billion, while operating margin decreased to 31% from 43% a year earlier. The company also reported free cash flow of $784 million in the quarter, compared with $8.5 billion in the prior-year period. The settlement may also have a near-term earnings impact. Meta expects to record an estimated $10 billion of legal expenses in the third quarter related to the agreement, an expense not included in the outlook provided with second-quarter results.
Meta continues to face legal and regulatory matters, including scrutiny related to youth-related issues. The company said such matters could affect its business and financial results.
Hedge Fund Ownership Declines Slightly
Institutional ownership data shows hedge funds maintained exposure to Meta despite a modest decline in holders. According to Insider Monkey, which tracks more than 1,000 elite hedge funds, 254 hedge funds held Meta shares in the second quarter of 2026, compared with 262 in Q1. Short interest remains limited at approximately 1.3% of float.
Cramer’s bullish view is based on Meta Platforms, Inc.’s advertising business, WhatsApp, and the company’s artificial intelligence investments. The company’s ability to maintain advertising growth while funding its AI infrastructure expansion will shape how investors assess the stock. With hedge fund ownership still significant and short interest at relatively low levels, investor attention remains focused on Meta’s execution, spending discipline and the returns generated from its AI investments.
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