3. Meta Platforms, Inc. (NASDAQ:META)
Market Cap: $1.494 Trillion
5-Year Net Income CAGR: 24.69%
TTM Net Income: $51.435 billion
Number of Hedge Fund Holders: 219
Third on our list of most profitable blue chip stocks is Meta Platforms, Inc. (NASDAQ:META), which is one of the American Big Tech that has evolved significantly since its inception. It has expanded its portfolio to include widely used platforms such as Facebook, Instagram, Threads, and WhatsApp.
While the company is making significant investments in several technology-related platforms and products, most of its revenue is generated through advertisement. Through strategic acquisitions and an expanding suite of products, it remains a key player in shaping the future of technology and communication.
On September 25, Meta (NASDAQ:META) introduced Orion, its first true augmented reality (AR) glasses, previously known as Project Nazare. These glasses aim to blend the appearance of traditional eyewear with advanced AR capabilities, marking a significant advancement in wearable technology.
The company is currently providing access to Orion for its employees and select external testers to refine the product before launching a consumer version. While it is still in the prototype phase and not yet available for consumers, it shows the commitment to creating a polished product. It plans to improve display quality, reduce the size further, and make the glasses more affordable as they move toward a consumer release.
Meta (NASDAQ:META) is expected to release its earnings on October 30 and some analysts are already showing optimism in its results. On October 9, The Fly reported that Cantor Fitzgerald analyst Deepak Mathivanan raised the price target for the stock from $660 to $670 while maintaining an Overweight rating on the stock.
The firm expects its Q3 results and Q4 outlook to surpass consensus estimates and noted strong ad performance in recent months and positive trends for future growth for the company. Cantor believes Meta (NASDAQ:META) will benefit from rising contributions from sectors like travel. Mathivanan mentioned that investor expectations are high due to recent strong performance, and they expect revenue guidance of $48 billion for Q4 to drive further share growth.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter:
“We are pleased to report that Meta Platforms, Inc. (NASDAQ:META), our largest position in the fund, has delivered a remarkable performance, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, equating to a 20% annualized return.
We would like to remind you that achieving these types of returns is never a straight path. From time to time, we might experience volatility — that’s simply part of the investment journey. In fact, wealth creation and volatility go hand in hand. There’s no escaping it; it’s the “price of admission” the market demands. If you take a look at the chart below, you’ll notice the drawdowns META stock has faced over the years, with 2022 standing out as a particularly challenging period, where the stock saw a 75% drop…” (Click here to read the full text)
