The Investing Case for Meta: Why the Magnificent Seven Includes an Overlooked Giant

When Warren Buffett stepped down as CEO of Berkshire Hathaway at the end of 2025, it marked the end of an era defined by disciplined investing and a relentless focus on economic moats. His successor, Greg Abel, now leads the conglomerate into uncharted territory. But before examining what comes next, it’s worth revisiting one of Buffett’s most intriguing investing decisions—or rather, a decision he never made. While Berkshire Hathaway holds three of the Magnificent Seven stocks today (Apple, Amazon, and Alphabet), one technology powerhouse conspicuously absent from the portfolio is Meta Platforms.

Buffett’s Investing Philosophy and the Tech Sector Shift

The Oracle of Omaha built his legendary career on a simple but powerful principle: invest in businesses with durable competitive advantages, or what he called economic moats. These structural barriers protect companies from competition and allow them to generate superior returns over decades. For years, Buffett avoided the technology sector entirely, believing he couldn’t fully understand the businesses or predict their long-term earnings power. This conservative investing stance served him well until 2016, when he finally expanded his horizons and purchased Apple shares.

That decision opened the door. Berkshire added Amazon to its portfolio in 2019, followed by Alphabet in 2025—likely with input from investment lieutenants Ted Weschler and Todd Combs. All three investments have delivered impressive returns, validating a shift in his investing approach toward quality technology companies.

A Decade of Stock Performance: Separating the Winners

The numbers tell a compelling story. Apple shares have climbed 966% since early 2016 (as of January 30, 2026). Amazon has risen 169% since the end of Q1 2019. Alphabet has increased 39% since the end of Q3 2025. These gains reflect the market’s confidence in companies that combine technological innovation with powerful competitive advantages.

Yet during this same period, another Magnificent Seven stock quietly delivered exceptional results. Meta Platforms shares have surged 177% over the past five years. For a company that Buffett chose not to invest in, Meta’s stock performance raises a nagging question: was this a missed opportunity or a prudent decision?

The Network Effect: Understanding Meta’s Invisible Moat

Meta’s competitive advantage isn’t immediately obvious to a traditional investor evaluating a balance sheet. The company possesses what might be the planet’s widest economic moat: the network effect embedded in its social media ecosystem. Facebook, Instagram, WhatsApp, and Threads all benefit from a self-reinforcing cycle of growth. Each new user makes the platform more valuable, while simultaneously making any competing social platform with fewer users functionally obsolete.

By Q4 2025, Meta’s apps had accumulated an astounding 3.58 billion daily active users worldwide. The data advantage compounds this moat. Meta collects vast amounts of user information that trains its algorithms, improving engagement for users and targeting precision for advertisers. This combination—massive scale plus unparalleled data—creates barriers to entry that rival the most defensible investing opportunities.

For an investing purist like Buffett, Meta presents a paradox. It checks every box for a company worthy of long-term investing: durable competitive advantages, network effects, strong financial performance, and barriers to new entrants. Yet Buffett remained cautious, potentially uncomfortable with the company’s business model or its exposure to regulatory risk.

The Changing Landscape: What Tomorrow’s Investing Strategy Might Look Like

Berkshire’s CEO transition signals potential shifts in the conglomerate’s investing approach. With Greg Abel at the helm, the company may be more willing to venture into sectors and industries that Buffett might have reflexively avoided. The successor generation of investing leaders may view technological disruption and digital platforms not as speculative bets but as foundational to long-term wealth creation.

This evolution in thinking reflects broader market realities. The investing landscape of 2026 is fundamentally different from that of 2015. Technology is no longer a sector to avoid; it’s the foundation of economic value creation across virtually every industry.

Reconsidering the Investing Framework: Lessons from Meta’s Story

Meta Platforms challenges conventional investing wisdom in productive ways. It demonstrates that a company can face intense regulatory scrutiny and competitive pressure while maintaining one of business’s strongest competitive moats. For investors seeking long-term growth opportunities, understanding why Meta succeeds despite its challenges matters as much as identifying the next Apple or Amazon.

The question isn’t whether Meta is a good company—its operational metrics and stock performance confirm that it is. The question is whether past investing frameworks, even those as successful as Buffett’s, can fully capture the value created by platform-scale network effects in the digital economy. As the investing community enters this new era of leadership and strategy evolution, that question deserves serious consideration.