Meta vs. Netflix: A Growth Stock Autopsy

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My aunt Carol, bless her heart, keeps asking me about stocks. Not in a “what should I buy?” way, more of a “are those internet companies still… happening?” sort of way. She’s convinced everything is a pyramid scheme, which, frankly, after a few earnings calls, doesn’t seem entirely unreasonable. This time, it was Meta and Netflix. Two companies, both down from their peaks, and both, apparently, essential to modern existence. I tried explaining growth rates, but she just wanted to know if Mark Zuckerberg was still wearing a hoodie. Anyway, I figured I’d lay out my thinking, mostly so I have something to send her that isn’t just a link to a Yahoo Finance chart.

Both companies are, shall we say, experiencing a bit of gravity. Netflix is down about 17% this year, which feels… dramatic. Meta’s closer to flat, which is either reassuring or just means they’re better at masking the inevitable. Everyone’s looking for a bargain, I suppose, but sometimes the cheapest option ends up costing you more in therapy.

Now, if you’re thinking Netflix’s steeper drop makes it the obvious choice, you’d be falling into a very common trap. The “beat-up-stock-will-bounce” fallacy. It’s like thinking a sad puppy is a better investment than a healthy one. Sentiment is a terrible metric, especially when your family is involved. My brother-in-law, a man who once tried to day trade penny stocks from a cruise ship, is very enthusiastic about Netflix. That alone is a red flag.

Meta: Spending Like There’s No Tomorrow (Which There Isn’t, But Still)

Meta’s fourth quarter looked… robust. Revenue up 24%, ad impressions rising, average price per ad inching up. It’s all very… positive. But the real story is what they’re planning to do with all that money. They’re talking about capital expenditures between $115 and $135 billion this year. That’s… a lot of money. It’s the kind of money that makes you question the very nature of reality. I mean, what are they building? A digital fortress? A robot army? I wouldn’t put it past them.

Apparently, it’s all about AI. Zuckerberg, during the earnings call, said something about an “AI acceleration.” He said it with such conviction, I almost started believing in the singularity. I pictured him in a darkened room, surrounded by blinking servers, whispering sweet nothings to algorithms. It was unsettling.

There’s risk, of course. If ad demand slows down, that spending could come back to haunt them. But I suspect they’ve thought of that. Or at least, they have a team of very expensive consultants telling them what they already know.

Netflix: The Slow Fade (and My Brother’s Streaming Habits)

Netflix had a decent quarter. Revenue up 17.6%, crossed 325 million subscribers. Good numbers. Solid. But the forecast is… less exciting. They’re projecting revenue growth of around 12-14% next year. It’s like watching a star slowly dim. And my brother keeps cancelling and re-subscribing, claiming he “needs to watch that documentary about competitive cheese sculpting.” The man has priorities.

They’re also hoping for a boost from advertising revenue, which is… optimistic. I’ve tried watching Netflix with ads, and it’s a truly harrowing experience. It’s like being held hostage by a series of brightly colored rectangles. I’d rather listen to my aunt Carol explain her stock market theories.

The problem isn’t that Netflix is doing badly. It’s that it’s growing slower than Meta, and the valuation is similar. It’s like choosing between a slightly slower car and a slightly faster car, but paying the same price for both. It doesn’t make a lot of sense.

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So, Which One? (And Avoiding Family Arguments)

Both stocks are trading at premium valuations. Meta’s price-to-earnings ratio is around 27, Netflix around 30. But Meta is growing faster, and they’re betting big on AI. It’s a risky bet, but it could pay off. Netflix is… reliable. Like a sensible pair of shoes. But I’m not buying stocks to be sensible. I’m trying to avoid becoming my aunt Carol.

If I had to choose today, I’d buy Meta. Unless Netflix suddenly starts growing at a ridiculous rate, or Meta’s spending spree turns into a disaster. Or my brother finally learns to appreciate the art of competitive cheese sculpting. Then all bets are off.

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2026-02-20 19:37