We recently published a list of 12 Best QQQ Stocks to Invest in Now. In this article, we are going to take a look at where Meta Platforms Inc. (NASDAQ:META) stands against other best QQQ stocks to invest in now.
Lunch’ to analyze the market’s reaction to the tariff announcements. McCartney referred to the situation as tariff policy ping pong, and highlighted how it adds to the uncertainty in Washington during a time when weak data is emerging from other areas. She explained that this has created a perfect storm of challenges, which includes seasonal pressures that make this time of year difficult. Retail buyers have stepped away from the market, and there is uncertainty for individuals regarding tax policy and for corporations concerning tariffs and taxes. The withdrawal of overleveraged bids has contributed to increased market volatility, which makes it harder for major tech companies to maintain their leadership roles.
The conversation then turned to the influence of key sectors, particularly the MAG7. McCartney noted that when these sectors underperform, they can generate downside pressure on the market, which contrasts with the desire for a broader market trade. She pointed out that while these tech stocks are down year-to-date, the overall market remains materially up and is annualizing at a high single-digit rate. She expressed optimism about market breadth and suggested that this could present a buying opportunity for investors to re-enter big tech.
Tech stocks face short-term volatility due to market uncertainty, but their long-term potential remains intact.
Methodology
We sifted through the Invesco QQQ exchange-traded fund (ETF) holdings to find 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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).
Meta Platforms Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 262
Meta Platforms Inc. (NASDAQ:META) is a technology company that focuses on connecting people through its diverse platforms. Operating through its Family of Apps (FoA) and Reality Labs (RL) segments, it provides social networking services like Facebook, Instagram, Messenger, Threads, and WhatsApp. It also develops virtual, augmented, and mixed reality technologies.
On February 18, Morgan Stanley reiterated an Overweight rating on the company due to its potential to lead in robotics. This follows a report from February 14 that detailed the company’s substantial investment in AI-powered humanoid robots designed to perform human-like physical tasks. The AI-powered humanoid robots are a part of the company’s vision to create personalized AI experiences, where robots could be tailored to individual needs and preferences.
Meta Platforms Inc. (NASDAQ:META) believes that achieving a breakthrough in AI engineering agents, which is crucial for advanced robotics, will provide an advantage in the AI landscape. The company’s emphasis on AI robotics is a key component of its broader embodied AI strategy, which aims to integrate AI with the physical world.
Meta Platforms Inc. (NASDAQ:META) has delivered a strong 22% IRR, which aligns with its growth, and is expected to continue mid-teens growth with potential to exceed estimates. Rowan Street Capital stated the following regarding the company 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 3rd on our list of best QQQ stocks to invest in now. While we acknowledge the growth potential of META, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
