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It's more Meta's (META) fundamentals powering the stock to record heights than a cozier relationship between Mark Zuckerberg and President Trump.
Or so argues Morgan Stanley managing director Brian Nowak.
"I don't think their relationship has actually impacted the [price-earnings] multiple in a material way," Nowak told me on chof360 Finance's Opening Bid podcast (see video above or listen below). "I don't think there's a multiple premium necessarily related to their relationship change now versus the first administration."
Meta's stock has been on a blistering run this year — especially in February — as Zuck's efforts to court Trump have coincided with a strong fourth quarter earnings report.
Shares are hovering near a record high. The stock is up 23% year to date and is the best-performing component of the "Magnificent Seven." The stock is up 5% in February alone, besting the relatively flat performance for the S&P 500 (^GSPC).
Nowak believes there is a lot to like fundamentally about Meta.
The first is the raw numbers, powered by several years of improving the platform and better advertising industry dynamics.
Earnings and revenue easily beat analysts' estimates. Profits were up 50% from a year ago.
Its app family (Instagram, Facebook, and WhatsApp) saw sales improve by about $7 billion year over year. The business added close to $7 billion in operating profits too.
In the last seven days, chof360 Finance data shows 23 analysts have pushed up their earnings per share estimates on Meta for 2025. A total of 20 analysts have hiked their EPS projections for 2026 in the past seven days.
54 out of 63 analysts that cover Meta rate the stock a Strong Buy or Buy.
"They're analyzing more instances of when you scroll up and down the feed, where do you stop, where do you stall, where do you scroll faster? And they're using more data points to essentially improve the relevancy of all the content that their users see by daypart," Nowak explained.
"And then they're able to also take that data and use it on the advertising side and determine are you more likely to click on ads in the morning when you're catching up from the night's news? Or is it, are you more likely to click on ads in the evening when you're scrolling through your daily catch up or your sports."
The next catalyst for Meta shares could be how the issues surrounding TikTok play out.
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