Zuckerberg's Lens

10 years ago, Alphabet was the largest company among today’s big tech companies. (I’m going to ignore Tesla and Nvidia in this discussion as they are more recent additions to this list). Remarkably, these five companies were clustered quite close to each other back in 2016 as their Enterprise Value (EV) were as follows:

Alphabet $413 Billion
Apple $374 Billion
Microsoft $332 Billion
Meta $265 Billion
Amazon $225 Billion

Today, Meta has the lowest EV among this group, and even the company that is just above them i.e. Amazon is worth ~$600 Billion more than Meta. Both Apple and Alphabet are worth more than twice that of Meta.

Of course, a lot of the increase in EV was driven by multiple expansion for some of these companies. Apple, for example, was trading at 5x LTM EV/EBIT multiple (no typo) back in 2016. Today, Apple, Amazon, and Alphabet all trade at high 20s LTM EBIT multiple whereas Microsoft and Meta trade at low 20s multiple.

While this decadal stat almost makes Meta look like a laggard, I think there is a very good chance that Zuckerberg is positioning Meta to re-order this ranking differently within the next 3-5 years which I will elaborate behind the paywall.

In addition to “Daily Dose” (yes, DAILY) like this, MBI Deep Dives publishes one Deep Dive on a publicly listed company every month. You can find all the 66 Deep Dives here.