Munger Mode rating: 4 out of 5 — Buy. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have owned wonderful businesses that spent nothing, and we have owned decent businesses that spent everything. Meta is a new animal to us: a wonderful business, one of the three or four best consumer franchises on earth, that has decided to spend nearly every dollar of its operating cash flow on computers. Family of Apps earned roughly $106 billion of operating income over the last four quarters on 3.6 billion daily users, and it raised prices 12% while growing volume 14% in the latest quarter. That is a moat. At the same time, free cash flow in the June quarter was $784 million against a $1.35 billion dividend, buybacks have been paused for three consecutive quarters, long-term debt has risen from $18 billion to $84 billion in four years, and there is another $349 billion of non-cancelable commitments sitting in the notes.
Recent filings analysed: 10-Q (2026-07-30), 8-K (2026-07-29), 8-K (2026-05-29), 8-K (2026-05-04).
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