We recently published a list of 10 Best Growth Stocks to Invest in for the Next 10 Years. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other best growth stocks to invest in for the next 10 years.
On March 8, Ben Snider, Goldman Sachs senior equity strategist, joined CNBC to discuss the state of the economy today. Snider noted that the key struggle has been the market struggle to assess the forward trajectory of the economy. The market entered this year with optimism for the growth trajectory. However, over the past few weeks, we have seen a very sharp downturn. There is good news to extract from the scenario. Snider explained that if we look at where the market is priced today, it seems much more reasonable. Therefore the base case remains the same the economy is in good shape and is growing. He also noted that a confirmation of the growth came in with the jobs report, moreover, earnings are still growing, meaning that the equity market should be moving higher too.
However, the key question that remains unanswered is what sectors investors should look forward to. Most of the sectors have been volatile. Therefore, as per Snider, the best approach would be not to go all in for a single sector. He likes healthcare, which has been one of the best-performing sectors in the market so far. This is because despite the performance the sector is still trading at the lowest valuations compared to the market. Snider mentioned that this may be a good buying period as historical data tells us that when an investor buys the S&P 500 down 5%, it generates a positive return on investment over the next 5 months 85% of the time.
Moreover, Goldman Sachs has anticipated moderate yet resilient global growth in 2025, driven by the strong performance of the United States. The firm expects the US economy to be a primary driver of global growth, supported by a robust labor market, consistent consumer spending, solid credit conditions, sufficient liquidity, and increased capital spending related to AI. In addition, regarding the tariff situation, Goldman Sachs believes that the “Fed Put” will come into play and ease monetary policy, however, terminal rates are expected to be higher than previously anticipated.
Our Methodology
To curate the list of the 10 best growth stocks to invest in for the next 10 years, we looked at various online rankings. Using these rankings we aggregated a list of best growth stocks for the next 10 years. Next, we checked the sales growth of each stock from Seeking Alpha and added only those companies that have grown more than 15% over the past 5 years. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders, sourced from Insider Monkey’s Q4 2024 database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Photo by Timothy Hales Bennett on Unsplash
Meta Platforms, Inc. (NASDAQ:META)
5-Year Sales Growth: 18.40%
Number of Hedge Fund Holders: 262
Meta Platforms, Inc. (NASDAQ:META) is a multinational technology company that operates social media platforms, digital advertising services, and virtual and augmented reality technologies. The company is investing heavily in the infrastructure development of artificial intelligence. The company has planned to invest around $60 billion to $65 billion in its AI infrastructure during 2025.
Rowan Street Capital, an investment management company, mentioned Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter. The hedge fund initiated its investment in the company in April 2018 and has since seen an internal rate of return of 22%. This IRR aligns with the company’s compounded growth in earnings per share and free cash flow per share during the six-year holding period Rowan Street Capital anticipates that Meta Platforms, Inc. (NASDAQ:META) will grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years.
During the fiscal fourth quarter of 2024, the company grew its revenue by 21% year-over-year to reach $48.39 billion. Management anticipates first quarter 2025 total revenue to be in the range of $39.5 billion to $41.8 billion. The heavy investment in AI that the company has dedicated for 2025, makes it one of the best growth stocks to invest in for the next 10 years.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter:
“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)
Overall, META ranks 2nd on our list of best growth stocks to invest in for the next 10 years. While we acknowledge the potential of META as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
