The Intrinsic Value Podcast · Sep 27, 2026 · 1h 29m · 62m saved
With Daniel Mahncke, Analyst at The Investor's Podcast Network and co-host of The Intrinsic Value Podcast · Shawn O'Malley, Analyst at The Investor's Podcast Network and co-host of the same show
In the second quarter, the price of a Meta ad in the US and Canada rose 20% while the number of ads shown there grew 9%. In Asia, impressions rose 17% and prices 1%.
Most explanations of Meta's weaker share price point to its lawsuits and its capital spending. Daniel Mahncke looked past both to the regional split, which he said suggests Meta is charging advertisers more in its richest market rather than getting them better results.
"So I know that's a lot of numbers, but to me that discrepancy suggests that pricing growth in the US is likely not going to be because the ads are actually becoming more effective, but rather that meta is sort of reducing advertisers return."
Daniel Mahncke and Shawn O'Malley, analysts at The Investor's Podcast Network, on The Intrinsic Value Podcast, in their second episode on Meta this year. Mahncke has built a position in Meta in his personal account and said he will not sell a share. O'Malley has chosen not to own the stock because of what he sees as its damage to society. Mahncke also built the three-scenario valuation model the episode ends on.
The full episode is covered here so you can skip it. 89 minutes of audio, 27 minutes of reading.
Here are the 16 insights that matter.
Key Takeaways
Meta's 2026 capex guidance has been raised several times, to $130B–$145B
Analysts project close to $200B for 2027
The $1.4T headline penalty in the multistate case came from Meta's own filings
Mahncke had expected $20B–$30B if Meta lost; it settled for less than $18B
Meta may pay only $12B of that settlement, over 10 years, if YouTube and TikTok match part of it
In the US and Canada, Q2 ad prices rose 20% and impressions 9%, which Mahncke reads as Meta squeezing advertisers
Thailand and Vietnam rank about 6th and 7th among Meta's countries by revenue but in the 30s by GDP
Meta could spend 20% of its capex on ads alone and the stock might double, O'Malley said
AI could turn every object in every photo into ad inventory, which Mahncke called the most bullish part of the case
Meta carries close to $700B of commitments off its balance sheet, up about 800% in a year
Mahncke's base case has Meta producing almost no free cash flow from 2026 to 2028
His base-case fair value is about $650–$750 a share
Neither host is pushing to add Meta to the Intrinsic Value portfolio
Mahncke keeps his personal shares; O'Malley would rather buy more Alphabet or Amazon
1. Capex Up, Voters Wary
O'Malley opened by asking what had changed since the show's first episode on Meta in January. The answer was two things: Meta's plan to build something close to a cloud business, and a major lawsuit.
Zuckerberg wants tens of gigawatts of data centers this decade
In January, Mark Zuckerberg posted on Threads that Meta wants to build AI infrastructure at scale: tens of gigawatts of data center capacity this decade and hundreds of gigawatts over the following decades. One gigawatt is roughly the output of a nuclear reactor. Meta brought in Dina Powell McCormick, a former government official, as president and vice chairman, to work on government partnerships and on financing the buildout. The hosts called it a telling hire for a company whose spending now needs someone to handle relations with Washington.
Data centers have become a local political fight
O'Malley said Virginia is the data center capital of the country, and that he never remembered them being controversial until recently. A member of his family spent years in court trying to win approval for a large data center on their land, and the deal just fell through.
He cited a Pew survey: about half of Americans say they are more nervous than excited about AI, 40% are equally excited and concerned, and 10% are more excited than concerned.
Mahncke said AI companies spent a long time telling people they were coming for their jobs, which did not help. He described a member of the show's mastermind community who used to work in the White House and now runs a consulting business that Meta, among others, hires for political connections.
"And from what I gathered I think Meta is not very good at let's say understanding how Washington works." — Daniel Mahncke
He recalled Meta's attempt about a decade ago to launch a stablecoin, which failed and which he said could have been huge had Meta played it better.
Capex guidance keeps rising
Mahncke said Meta's 2026 capital spending guidance has been raised several times and now sits between $130 billion and $145 billion. There is no official 2027 guidance, but analysts project close to $200 billion, partly because of the cloud plans. He said Zuckerberg sees AI as his third attempt at building a platform.
