12 Best Quality Stocks to Invest in Now

2. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 262

Analyst Justin Post from Bank of America Securities reiterated a “Buy” rating on Meta Platforms, Inc. (NASDAQ:META)’s stock, setting a price objective of $710.00. The analyst’s rating is backed by a combination of factors that demonstrate the company’s expanding AI capabilities, which can enhance ad revenues and fuel higher advertiser ROI. Furthermore, Meta Platforms, Inc. (NASDAQ:META) remains focused on monetizing its messaging services and exploring new revenue streams from untapped assets such as Threads and Marketplace.

As per the analyst, Meta Platforms, Inc. (NASDAQ:META)’s disciplined cost management further strengthens its favourable outlook. There remains a potential for an ad spend shift because of disruptions from competitors, which can benefit Meta Platforms, Inc. (NASDAQ:META). As per FT, the company has reduced its equity-based awards for the bulk of its employees amidst its focus on significant investments into AI projects and infrastructure. The company anticipates FY 2025 capital expenses in the range of $60 billion – $65 billion. The development of generative AI tools such as Llama and Meta AI results in fresh possibilities for user engagement and content creation.

Rowan Street Capital, an investment management company, published the Q4 2024 investor letter. Here is what the fund said:

“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)