1. Meta Platforms Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms Inc. (NASDAQ:META), formerly known as Facebook, is a multinational technology conglomerate that focuses on social media and online services and engages in the development of products that enable people to connect worldwide.
Their most well-known platforms include Facebook, Instagram, WhatsApp, and Messenger, with over 3.2 billion users as of March. It monetizes through business users and AI-driven ad improvements and managed to grow twice as fast as Google in the ads space in Q2 2024, despite an increase in price per ad figures.
In the second quarter, the company saw a 7% increase in daily active users while achieving a remarkable 73% increase in earnings per share, and a 22.10% rise in revenue as compared to the prior year. This translated into a revenue of $39.07 billion. The revenue surge came from a 10% increase in both the number of ads served and the cost per ad. 219 hedge funds were long in Meta (NASDAQ:META) as of June 30. GQG Partners is the top investor with a stake worth $5.4 billion.
Meta Platforms Inc. (NASDAQ:META) has acquired nearly 600,000 of Nvidia’s H100 GPUs and is also developing its custom chip. It has introduced its own AI models, such as Llama, which is integrated into its apps and is available to external developers.
Its strong user base, AI expertise, and advanced advertising drive its growth. Through these strengths and a focus on innovation, it is well-positioned for future success. The company’s expansion into the metaverse, powered by AI and immersive technologies, creates new growth opportunities. Their AI-driven products, like Meta AI and Meta Smart Glasses, offer unique experiences to users.
Fred Alger Management stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q1 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) operates the world’s largest social network, with over 3 billion monthly active users across its platform. The company generates revenue predominantly from advertising. which accounts for over 95% of its total revenue, evenly split between North America and international markets. During the quarter, shares contributed to performance following the release of strong fiscal fourth quarter operating results, with revenues and earnings surpassing analyst estimates. The better-than- expected revenues were attributed to strong advertiser demand and Al-driven ad improvements. Moreover, the company materially raised its fiscal first quarter sales and earnings guidance above analysts’ estimates, buoyed by continued strong advertiser demand trends and enhancements to Reels. Advantage+. Click-to-message, and Shop Ads. Further, management noted that ongoing investment in Al is enhancing user engagement and advertiser returns through improved targeting and measurement. Separately, Meta authorized a new share repurchase plan representing approximately 5% of its market capitalization and announced the initiation of its first dividend, implying an approximate 0.4% yield.”
As we acknowledge the growth potential of Meta Platforms Inc. (NASDAQ:META), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the ones on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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