Dear Copiers,
I’m pleased with the strong Q2 results from both $Meta and $0700.HK (Tencent) which continue to justify their place as long-term holds in the portfolio.
Meta posted revenue of $47.5B (+22% YoY) and net income of $18.3B (+36%), with operating margin expanding to 43%. Ad impressions grew 11% and average price per ad rose 9%, reflecting both higher engagement and stronger monetisation. Family Daily Active People reached 3.48B (+6%), while free cash flow came in at $8.6B despite $17B of capex, largely directed toward scaling AI data centre infrastructure.
Tencent reported revenue of RMB184.5B (+15% YoY), with non-IFRS operating profit of RMB69.2B (+18%) and net profit to shareholders of RMB55.6B (+17%). Domestic games like Honour of Kings and Delta Force performed strongly, while international titles such as Clash Royale and PUBG Mobile delivered record engagement. Marketing services revenue surged 20% on AI-driven ad upgrades, and FinTech/Business Services rose 10%. Tencent closed with RMB468B in cash and executed HKD19.4B in share buybacks.
The key watchpoint for Meta and Tencent (but Meta to an even greater extent) and big tech broadly is the ROI on their unprecedented AI-related capex. Future earnings growth will need to validate this heavy infrastructure spend, which I see as the defining factor for the sector over the next few years. This will be something I continue to watch closely.... Show More
Tencent has a greater upside than Meta, since its valuation is much cheaper and growth is re-accelerating ... Show More
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Fri Jan 16 2026 22:46:59 GMT+0000 (Coordinated Universal Time)
