3. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms, Inc. (NASDAQ:META)’s Facebook boasts over 3 billion monthly active members, making it the largest social network in the world. The platforms of American IT giants are attractive to advertisers because of their expanding user base and engagement, as well as the valuable data they generate. These precious assets should help the company’s top-line growth and cash flow, and Morningstar analysts anticipate that advertisers will keep spending more cash online.
META is heavily investing in the metaverse, virtual reality, and augmented reality space through its Reality Labs division. However, the company has faced criticism for making big payments to these new consumer channels.
BofA Securities maintains the company’s $550 price target, even though the company plans to cut Reality Labs’ hardware spending by 20% by 2026. Despite the continued high level of customer interest in AR glasses, the possible budget reduction is seen as a calculated response to the declining demand for VR products.
In Q2 2024, Meta Platforms Inc. (NASDAQ:META) reported a $13.5 billion profit, which exceeded expectations and increased the company’s stock price by more than 7%. Revenue for the most recent quarter was $39 billion, a 22% increase over the previous year and above market expectations. The California-based tech giant’s third-quarter revenue is predicted to reach between $38.5 billion and $41 billion.
Alger Focus Equity Fund 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.”
Among the hedge funds we tracked, Ken Griffin’s Citadel Investment Group is the largest shareholder in the company, with 12,428,700 shares worth $6.27 billion.
