2) Meta Platforms, Inc. (NASDAQ:META)
Number of hedge fund holders: 219
Meta Platforms, Inc. (NASDAQ:META) operates as a social technology company. It builds applications and technologies that help people connect, locate communities, and grow businesses.
Considering the company’s network effects concerning its massive user base, and intangible assets consisting of a massive collection of data users have shared on the company’s sites and apps, Meta Platforms, Inc. (NASDAQ:META) appears to be well-placed for strong and stable growth over the medium term. Considering the company’s capability to profitably monetize its network through advertising, the company should comfortably generate excess returns on capital for the foreseeable future.
Meta Platforms, Inc. (NASDAQ:META)’s ad revenue per user continues to grow. This demonstrates that advertisers are seeing value in working with the firm. The company has strategically accumulated data about everyone via Facebook and/or Instagram accounts, which are benefiting the advertisers in some form or the other. In 2Q 2024, the company’s average price per ad went up by 10% YoY. The company continues to incorporate AI technology into its various offerings and focuses on launching VR products, which should enhance user engagement and drive further growth in advertising revenue.
In 2Q 2024, Meta Platforms, Inc. (NASDAQ:META)’s advertising revenue increased $6.83 billion, or 22% on the YoY basis because of growth in ad impressions delivered and average price per ad. The growth in ad impressions delivered was mainly because of an increase in users and their engagement with the company’s products. For 3Q 2024, it expects total revenue in the range of $38.5 billion – $41 billion.
Wolfe Research initiated coverage on shares of Meta Platforms, Inc. (NASDAQ:META) on 16th July. They issued an “Outperform” rating and gave the price target of $620.00. Mar Vista Investment Partners, LLC, an investment management company, released second quarter 2024 investor letter. Here is what the fund said:
“During the quarter, we established new investments in Broadcom and Meta Platforms, Inc. (NASDAQ:META). We previously divested from Meta during a period of stagnant advertising growth and the company’s initial, significant investment in the metaverse project. At that time, investors appeared complacent to the risks associated to an increasingly competitive landscape, and the Street’s robust financial expectations as the company transitioned towards monetizing short-format video (Reels). The subsequent decline in Meta’s stock price during 2022 reflected these concerns.
Since then, Meta has demonstrably shifted its strategic focus. The company has prioritized operational efficiency, implemented strategies to monetize Reels effectively, and initiated a robust artificial intelligence (AI) development program. We believe the focus on AI represents a more prudent capital allocation strategy compared to the earlier metaverse initiative. Meta AI holds significant potential to unlock substantial monetization opportunities and enhance user engagement, while maintaining tight controls on operating costs…” (Click here to read the full text)
