1. American Tower Corporation (NYSE:AMT)
Number of Billionaire Investors: 16
Number of Hedge Fund Holders: 70
American Tower Corporation (NYSE:AMT) is a real estate investment trust that owns, operates, and develops wireless communications and broadcast towers. Wells Fargo analyst Eric Luebchow upgraded the company’s stock to “Overweight” from “Equal Weight” with a price objective of $230, up from $210. The firm is being optimistic about the tower sector, citing uncertain macroeconomic conditions, and bottoming of billings growth in 2025, together with an acceleration in funds from operations growth as churn headwinds ease. American Tower Corporation (NYSE:AMT)’s strategic pivot towards developed markets and data centers can enhance the long-term growth prospects and enhance earnings quality. Notably, the developed markets provide more stable regulatory environments and economic conditions, which can result in more predictable cash flows.
The expansion into data centers remains in line with the increasing demand for cloud services and digital infrastructure, offering new avenues for growth over and above the traditional tower assets. The diversification can lead to a more resilient business model and elevated valuations from investors looking for a reduced risk profile and exposure to high-growth sectors. Amidst the challenging macroeconomic environment, the demand for connectivity throughout American Tower Corporation (NYSE:AMT)’s global platform continues unabated. The focus on enhancing the quality of earnings via portfolio management, disciplined capital allocation, and balance sheet strength place it well against volatility and uncertainty.
Meridian Funds, managed by ArrowMark Partners, released its Q4 2024 investor letter. Here is what the fund said:
“American Tower Corporation (NYSE:AMT) is a leading global owner and operator of wireless communications infrastructure, with a portfolio spanning the U.S. and key international markets. We hold American Tower for its exposure to the secular growth in wireless data consumption and its strategic positioning in underpenetrated emerging markets. The company benefits from long-term contracts with investment-grade wireless carriers, providing strong visibility into future cash flows. This quarter, performance was mixed. Revenue met expectations but fell short of consensus. Adjusted EBITDA declined slightly year-over year, impacted by the divestiture of its India business and elevated bad debt expense. However, organic tenant billings growth remained healthy, with U.S. and international markets posting solid growth. While we maintain conviction in American Tower’s ability to benefit from increasing data consumption and 5G network deployments, near-term currency headwinds and regional challenges warrant monitoring.”
While we acknowledge the potential of AMT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than AMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
