1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 194
Jim Cramer gave some bullish comments about Meta Platforms, Inc. (NASDAQ:META) recently. He said that Mark Zuckerberg is one of the most “determined” people out there and Meta Platforms, Inc. (NASDAQ:META) will be able to “make money” for the shareholders.
In late February, Bank of America analysts listed some top companies that stand to benefit from the latest AI boom. Meta Platforms, Inc. (NASDAQ:META) was in the list, as BofA highlighted the company’s LLaMA large language model announcement.
Meta Platforms, Inc. (NASDAQ:META) is one of the most popular tech stocks among the 943 elite hedge funds tracked by Insider Monkey. As of the end of the last quarter of 2022, 194 hedge funds had reported owning stakes in Meta Platforms, Inc. (NASDAQ:META), much higher than 177 funds at the end of the previous quarter. The biggest hedge fund stakeholder of Meta Platforms, Inc. (NASDAQ:META) was Boykin Curry’s Eagle Capital Management which owns a $1.1 billion stake in the company.
Baron Fifth Avenue Growth Fund made the following comment about Meta Platforms, Inc. (NASDAQ:META) in its Q4 2022 investor letter:
“We also added to Meta Platforms, Inc. (NASDAQ:META) in the fourth quarter. Foreign currency movements and the weakening macro environment have impacted Meta’s revenue growth rates in the near term (revenues declined 4% year[1]over-year in the most recently reported third quarter), while investors continue to be focused on the company’s growing expenses and capital expenditures, which create a double-whammy impact on margins and free[1]cash-flow. This hyper-focus on the near term (driving the stock down 25% the day after earnings) overlooks the company’s long-term prospects, in our view. First, Meta has 2.9 billion daily active users and is growing (it was up 4% year-over-year). Second, Meta is already seeing significant user engagement for its Reels product that competes with TikTok. Reels reached 140 billion daily views across Facebook and Instagram, a 50% increase over the last 6 months, and, as importantly, Reels engagement has been incremental to time spent on the platform. Third, Reels is rapidly scaling its monetization, hitting a $3 billion revenue run-rate during the third quarter, up from $1 billion in the second quarter, and, based on rumored numbers for TikTok in 2022, likely already has a 15% to 25% market share since its standing start in 2021. Fourth, while the company continues growing its expenses, we are encouraged by the recent cost cutting announcements and believe that continued investment in AI-infrastructure will pay off, as the company works to regain the lost signal from Apple’s IDFA and ATT changes. Lastly, the sell-off in the shares resulted in a deeply undervalued stock for those investors willing to look out a few years, with its next-12-months earnings yield climbing above 9% during the quarter. This yield also compares to about 6% for the S&P 500 Index.”
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