the real question is: is the ad model overvalued?
I think so for the following reasons: ad blockers, users getting desensitized to ads, diminishing returns of the amount of data one needs on a user to sell.
I think OP has the right conclusion but the wrong reasons.
what do you think?
Shorting GOOG is betting not only that ads will decrease long term, but also that the other fields won't increase.
Yes, I realize even cloud has a long way to go, revenue wise, compared to ads. But on the other hands ads has a long way to fall. And public cloud (including Google's cloud) is still growing exponentially.
In other words: I have no reason to think I know better than the invisible hand of the market.
That's GOOG. FB I've not looked into as much.
I don't understand how anyone can talk any more about the market having mystical powers after what we've seen in the past few months.
If the market was priced correctly in late February, and now that it's regained almost all it lost, how could it be priced correctly in late March at 1/3 lower? And if you swallow that, how is it that it went lower in a basically linear fashion over a month rather than instantly as whatever information was absorbed got out?
This really is bugging me as an "emperor's new clothes" situation, you can argue any which way on which is the right price, but how can you believe for an instant that they are all correct, reflecting all available information at all times?