Sunday Scaries: 11/2/25

Best of the Week from Accrued Interest

Happy Sunday Funday! As you brace yourself for your Monday morning inbox, I wanted to quickly share a recap of my most relevant notes from the past week.

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1)Meta’s Drop Post-Q3: Why It’s an Overreaction, 10/30

Last week, Meta’s stock dropped over 11% after its Q3 earnings report, an event I closely followed and strongly disagreed with. The market’s sell-off, driven by concerns over the profitability of Meta’s META 0.00%↑ AI investments, is misguided. I am currently preparing a detailed analysis advocating a NEW long position on Meta stock, a stance I have not taken all year.

I disagree with the market’s concern that the substantial capital expenditure in AI will not yield concrete results. As I highlighted last week using Meta’s Q3 earnings report KPIs, the acceleration of advertising impression growth to +14% YoY demonstrates that AI is enhancing the matching algorithm.

In my August Q2 write-up for Meta, I referred to a favored rule of thumb for trading Meta stock. You can find more details in the Meta Q2-25 Earnings Recap.

I am going to be talking a lot about impression growth in this post, because it is the strongest indicator of business health at Meta. And when impression growth accelerates, it is often a leading indicator that revenue (and profits) are about to accelerate as well.

I later highlighted Meta’s announcement of a $30 billion bond sale, the year’s largest corporate offering. This demonstrated significant confidence from credit investors in Meta’s future cash flows. Debt investors are typically more conservative than equity investors, as their primary concern is protecting their downside, given that their upside from debt is capped.

Meta’s decision to incur debt is a sound one, despite my frequent assertion on Accrued Interest that “financial engineering is not long-term sustainable strategy.” The company’s balance sheet remains underleveraged, and its free cash flow generation is robust. This is due to the Core Family of Apps, which continue to deliver 50% operating margins, excluding the Reality Labs segment.

Trading at less than 19x 2027 normalized earnings, Meta is one of the more attractive contrarian longs among big-tech and specifically amongst the cheapest of the “Mag 7” stocks. Stay tuned and please subscribe to Accrued Interest and you will get my Meta stock pitch delivered to your inbox as soon as I hit publish.

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2)Meta Q3-25 Earnings Reaction Thread, 10/29

On Wed, I tried a new approach by staying up late to tweet my real-time reactions to Meta’s Q3 earnings as I reviewed the press release and presentation.

You can follow me on Twitter, Threads or Substack Notes to get my tweet storm during the course of the night. These are going to be the building blocks of my longer Meta pitch, but I did not want to hold back my thoughts in the meantime since the stock is reacting right now.

• Link to Twitter Thread

• Link to Threads Thread

• Link to Substack Notes Thread

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3)Amazon’s Layoffs: What It Means for the Market and Spending, 10/28

My video discussing Amazon’s AMZN 0.00%↑ announcement of up to 30,000 white-collar layoffs was not meant as investment advice. I do not hold a position or strong opinion on Amazon stock; I primarily use it as an indicator to understand trends in industries like advertising, where Amazon operates, and the U.S. economy overall.

I contend that the Amazon layoffs serve as an indicator of further white-collar job cuts to come from other companies. This trend could exert negative pressure on consumer spending in 2026, a factor that investors may not be fully incorporating into their financial forecasts.

In my video, I discussed how the wealthiest 10% of Americans are increasingly responsible for an unsustainable level of consumer spending. Despite this, I do not foresee an imminent recession. This is because affluent Americans are still benefiting from a positive wealth effect due to the S&P 500 reaching new all-time highs, even with reduced job security.

When it comes to Accrued Interest, I remain committed to being a strong fundamental investor, evaluating individual companies within their respective industries. However, a savvy investor must also be keenly aware of the broader market environment. Therefore, I will be closely monitoring announcements from other major tech firms regarding potential corporate layoffs in the upcoming weeks and months as we approach the end of the year.

-Accrued Interest

Disclaimer: The information presented in this Substack is for educational purposes and should not be construed as investment advice. Investors should make their own decisions regarding the prospects of any company discussed here, as I am not a registered investment advisor.

You can always reach me at simeon@accruedint.com.