4. Meta Platforms, Inc. (NASDAQ:META)
Abrams Capital Management’s Q3 2024 Investment: $355.23 Million
Percentage of Abrams Capital Management’s Portfolio: 5.7%
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) is Abrams Capital Management’s largest holding in the internet content and information segment. The company, which owns some of the biggest networking apps, offers exposure to the multibillion-dollar digital advertising business from which it generates a significant chunk of its revenues.
Meta Platforms, Inc. (NASDAQ:META) benefits a great deal from owning four of the seven most widely used social media platforms worldwide. Facebook, WhatsApp, Instagram and Messenger attract more than 3.2 billion unique visitors daily, each with more than a billion monthly active users. Consequently, the company has become the second-largest ad tech company in the world, behind Alphabet’s Google.
Meta Platforms, Inc. (NASDAQ:META) is using AI to boost engagement and reduce ad costs. AI recommendations have increased time spent on Facebook and Instagram by 8% and 6% this year. On November 20, Meta announced new Messenger features, including AI backgrounds for video calls, HD video calls, noise suppression, and voice isolation. Over a billion people use Messenger monthly.
Meta Platforms, Inc. (NASDAQ:META) delivered impressive third-quarter results on October 30, 2024. The company reported $6.03 earnings per share and $40.5 billion in revenue for Q3 2024, exceeding analyst expectations of $5.22 earnings per share and $40.2 billion in revenue. The growth came as the company attracted more advertising budgets. Increased investment in artificial intelligence to enhance user experience in apps, and enhance engagement levels should allow the company to continue attracting more advertising campaigns.
According to Insider Monkey’s database, 235 hedge funds held Meta Platforms, Inc. (NASDAQ:META) at the end of the third quarter, up from 219 in the previous quarter.
Alger Spectra Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q3 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) operates the world’s largest social network, with over 3 billion monthly active users. The company generates more than 95% of its revenue from advertising, evenly split between North America and international markets. During the quarter, shares contributed to performance following the release of strong fiscal second quarter operating results, with revenues and earnings beating analyst estimates. Management also raised their fiscal 2024 revenue guidance, citing improved advertising monetization. CEO Mark Zuckerberg stated that AI has played a key role in these successes, as the company is leveraging AI to enhance targeting, measurement, ranking, and ad delivery. Higher user engagement, driven by video ranking, content recommendations, and single video views, has also supported growth. Additionally, the optimization of ad placements within videos and automation of ad campaigns are further boosting monetization.”
