To The Moon

Asymmetric Investing isn’t about being right about every stock; it’s about being VERY right when I do find a winner.

I’m swinging for 10-run homeruns (yes, I know those don’t exist), not for a high batting average.

That philosophy can lead to high variability in returns. If I get a trend wrong or the market is focused elsewhere (ahem, AI in 2026), I can underperform for a long period of time, even if I’m beating the market long-term.

But one winner can also make up for a lot of mistakes.

In 2024, that was $Spotify Technology S.A.(SPOT)$ ( ▲ 2.93% ).

In 2025, it was $Robinhood(HOOD)$ ( ▼ 3.83% ).

This year, there haven’t been any big outperformers.

Until now. $Zeta Global Holdings Corp.(ZETA)$ ( ▲ 2.8% ) has suddenly risen 69% in the past three months.

The trend could turn south, but I think the market is starting to see the potential I saw when I wrote the Zeta Spotlight in February. This is an AI application that’s adding so much value to customers that it could grow at high double digits for the foreseeable future.

Best of all, revenue growth, margin expansion, and multiple expansion are all working in its favor.

Zeta’s Growth

Let’s start with the growth story because that’s what Zeta is all about. At its core, Zeta is a platform that helps marketers make the highest ROI decisions with their marketing dollars. The company plugs into Google, Meta, connected TVs, and more, and allows marketers to buy ad space and measure how successful those ads are.

More users, higher ROI for customers, and more ad spend are all good for Zeta.

Management thinks the existing business could become a $2.3 billion revenue business with $371 million in free cash flow annually by 2028.

And management has shown a consistent ability to outperform guidance in part because they keep making the opportunity bigger.

Expanding the Aperture

There are a few areas of expansion in 2026 that make the opportunity bigger.

The first is just expanding the core to more marketers. Originally, Zeta was focused on big businesses like Nike and Gap, which do their own ad buying. Now, Zeta is selling to agencies that are expanding the addressable market.

Another potentially large growth driver is a recent partnership with Palantir. CFO Chris Greiner recently said this about the deal:

Palantir is important for a number of reasons, and it is different than others in that Palantir has defined revenue and count joint win goals that is different than other parts of our partnerships, how they are structured. It is highly incentivizing for someone as incredible and as scaled as Palantir and little old Zeta. It is meaningful to both of us. We have a pipeline of opportunities that have been quarantined off that are existing U.S. commercial customers of Palantir that are spending $1 billion+ in marketing. That would be totally incremental to Zeta. If you go what the value proposition looks like, it is one thing to have a partnership, and obviously Palantir, for what they do, has an incredible magnetic attraction to them.

What makes that so is that Palantir is exceptional at helping you as an enterprise create a digital twin of every single piece of data inside your business, whether that is your vendor relationships, your processes and procedures, your people-based, your employee-based information, your customer information. They create a machine-readable version of all of that that allows you to be hyper-efficient and make better decisions. Inside four walls, Palantir is great. Outside your four walls, Zeta does the exact same thing.

By virtue of having our Data Cloud, we go into customers, and we say, "Here is what is happening outside your four walls relevant to your existing customers and prospects that we know are in market for your brand or a competitor's brand." So now you have two organizations with this incredible data and intelligence asset, one that makes you perfect at monetizing what is happening inside your four walls, another that can do the same of what is happening outside your four walls. It creates very interesting, not just marketing use cases, but I think business intelligence use cases as this partnership matures. It has only been in place for a month or so, right? We're early, and you don't want to get too tempted to draw trend lines off of it, but it has some really interesting aspects to it.

Chris Greiner, CFO

We don’t know the impact yet, but management thinks the Palantir deal will allow Zeta to grow alongside one of the hottest companies in technology.

The third area of growth is transforming into a business intelligence product. Zeta is ingesting information about a company’s sales and marketing, so it makes sense that it could also help drive decisions like inventory planning, the product pipeline, expansion locations, and more.

Bottom line, Zeta is a growth machine right now with a lot of areas of potential growth ahead. And they’re taking business from bigger competitors like The Trade Desk.

A Well-Priced Growth Stock

The perfect Asymmetric Stock has 3 things going for it:

1. A high rate of revenue growth that can compound long-term.

2. Expanding margins (operating margin is my preferred metric).

3. Valuation multiple tailwinds.

Zeta’s growth has been outstanding. You can see revenue growth has been over 30% for four straight quarters, and management expects full-year growth to be 39% to 40%. This is well above competitors.

Margin expansion has been consistent over the past few years for Zeta as well.

On the valuation front, Zeta is more expensive than peers like Salesforce $CRM ( ▼ 2.56% ), The Trade Desk $TTD ( ▼ 2.89% ), and Hubspot $HUBS ( ▼ 6.81% ), but it deserves a premium given the higher growth rate.

But look at how depressed price-to-sales multiples are today compared to just a year or two ago.

If Zeta continues to grow the way it has recently, could it command a 10x price-to-sales multiple or even a 20x multiple? The Trade Desk traded for a higher multiple in 2024!

Multiple expansion is icing on the cake for a company whose operations keep getting better and better.

Momentum In All the Right Places

Zeta’s run on the market may not continue in the short term, but I think long-term, this is one of those companies that we look back and see a clear compounder with tailwinds in many areas of the business and market.

Investors still seem to be skeptical that Zeta’s growth is durable, but if that shifts, the stock still has runway to grow.

Will this be the stock that drives the portfolio in 2026?

It’s now the second largest position in the portfolio at 7.3% of the portfolio, so continued momentum in the second half of the year could have a big impact.

I like where Zeta sits today and think there’s a lot of potential, so this is a stock worth watching if it’s not on your radar yet.