10 Best Performing S&P 500 Stocks So Far in 2025

8. Meta Platforms Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 235

Year-to-Date Performance as of February 17: 25.82%

Meta Platforms Inc. (NASDAQ:META) develops products that connect people through mobile devices, PCs, VR/MR headsets, AR, and wearables. It operates through its Family of Apps (FoA) and Reality Labs (RL) segments. Its FoA includes Facebook, Instagram, Messenger, Threads, and WhatsApp, while RL focuses on VR, AR, and MR hardware, software, and content.

The company’s advertising revenue within its FoA segment grew 21% year-over-year to $46.8 billion in Q4 2024. This growth drives its stock price surges. It’s using AI in two ways to boost ad revenue. One is through Meta AI, which is a personalized assistant with over 700 million monthly active users. The other is Andromeda, an AI-powered machine learning system that improves ad targeting and performance.

These enhancements are driving its bottom line, with Q4 EPS growing by 60% year-over-year. The company’s commitment to AI is evident in its substantial capital expenditures, which reached $37 billion in 2024. AI infrastructure developments from these investments include massive data centers and advanced AI models like Llama.

The focus on AI is not limited to software. Meta Platforms Inc. (NASDAQ:META) is also exploring hardware innovations, such as the Ray-Ban Meta AI glasses, which have reportedly sold over 1 million units. It’s also reportedly developing AI-powered humanoid robots, creating an RL team to build the underlying AI, sensors, and software for other manufacturers. Tigress Financial reiterated a Buy rating on the company with a $935 price target on February 11 for these reasons.

Rowan Street Capital highlighted the company’s strong performance, its successful long-term investment (22% IRR), and its optimistic outlook based on various growth initiatives. It stated the following regarding Meta Platforms Inc. (NASDAQ:META) in its Q4 2024 investor letter:

“Meta Platforms, Inc. (NASDAQ:META): Investment Initiated: April 2018: Internal Rate of Return (IRR*): 22% *IRR represents the annualized rate of return on an investment, accounting for the timing and magnitude of cash flows over the holding period.

For META, our 22% IRR aligns closely with the company’s compounded growth in earnings per share (EPS) and free cash flow per share during the 6 years holding period.

Looking ahead, Meta is expected to grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years. There’s a good possibility that it could exceed these estimates, considering the breadth of growth initiatives currently in place, such as advancements in Al, monetization of Reels, expansion into business messaging, and the ongoing development of the metaverse…” (Click here to read the full text)