Meta Platforms’ (META) Capital Allocation Strategy

4 weeks ago 6

Soumya Eswaran

Fri, July 17, 2026 astatine 9:10 AM CDT 3 min read

Wedgewood Partners, an concern absorption company, released its first-quarter 2026 capitalist letter. A transcript of the missive tin beryllium downloaded here. Wedgewood Composite delivered a nett instrumentality of 9.4% successful the 2nd 4th compared to 15.2% for the Standard & Poor's 500 Index, 16.7% for the Russell 1000 Growth Index, and 13.9% for the Russell 1000 Value Index. The steadfast is optimistic astir the semipermanent maturation of hyperscalers and has accrued its investments successful this sector, citing their important net imaginable and important relation successful AI adoption. Capital has besides been redirected towards exertion hardware stocks, particularly semiconductors, which present marque up a larger stock of the S&P 500 Index. Semiconductor stocks person benefited from hyperscalers' spending, but the steadfast expresses caution astir cyclical hazard and volatility. However, the momentum-driven marketplace negatively affected the Wedgewood fund's high-quality stocks, starring to a 25% instrumentality implicit the past 15 months, importantly underperforming the 90% summation of the S&P 500 Momentum ETF (SPMO). In addition, delight cheque the Fund's apical 5 holdings to cognize its champion picks successful 2026.

In its Q2 2026 capitalist letter, Wedgewood Partners highlighted Meta Platforms, Inc. (NASDAQ:META). Meta Platforms, Inc. (NASDAQ:META), the genitor institution of ascendant societal media platforms, is simply a multinational exertion institution that develops products to link people. On July 16, 2026, Meta Platforms, Inc. (NASDAQ:META) closed astatine $664.54 per share, reflecting a marketplace capitalization of $1.68 trillion. Meta Platforms, Inc. (NASDAQ:META) posted a one-month instrumentality of 10.12%, portion its shares mislaid 9.75% implicit the past 52 weeks.

Wedgewood Partners stated the pursuing regarding Meta Platforms, Inc. (NASDAQ:META) successful its Q2 2026 capitalist update:

"Although Microsoft, Amazon, and Meta Platforms, Inc. (NASDAQ:META) person antithetic concern models and were not needfully apical drivers of show during the quarter, we presumption their concern accidental set, from some a compounding and returns position and a component-cost hedge perspective, arsenic akin to Alphabet's.

Last but not slightest successful the capex spending bonanza is Meta Platforms. While they person surely received its stock of disapproval for precocious expanding its 2026 capex plans by astir $10 billion, citing DRAM inflation, we'd similar to constituent retired that the warrants Meta holds connected Advanced Micro Devices (AMD), related to a strategical sourcing statement with AMD struck successful precocious February (~5 months ago), are present worthy adjacent to $90 billion, by our estimation (a swift 9 times much than the incremental DRAM ostentation for 2026). Meta's sourcing vantage from its monolithic standard gives it the bargaining powerfulness to support commodity outgo ostentation successful check, which investors are truthful disquieted about. Although this concern successful AMD does not technically suffice arsenic a GAAP-based accounting hedge, it is surely an economical hedge that we judge investors person wholly overlooked, adjacent though it should service to blunt the effects of DRAM ostentation and bolster returns for years to come."

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