We recently published a list of Top 10 Stocks to Buy According to Adage Capital Management. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other top stocks to buy according to Adage Capital Management.
Adage Capital Management, based in Boston, is a major investment firm specializing in managing the broader market’s assets, with a strong focus on Endowments and Foundations. Among its prominent clients are institutions such as Harvard University, Dartmouth College, Northwestern University, the American Red Cross, and the Getty Foundation. Over the last 15 years, Adage and its predecessor, the Select Equity Group at Harvard Management Company, have consistently surpassed the wider market’s performance by an average of 3.5%.
The firm’s origins date back to the mid-1980s when co-founders Phillip Gross and Robert Atchinson met as investment analysts for Harvard’s endowment. In the 1990s, following controversy over large performance bonuses at Harvard Management, they, along with an 18-person team, left to establish Adage Capital Management. Their launch was backed by a $1.8 billion initial investment from Harvard, with an agreement that the university would receive 10% of Adage’s earnings.
Adage Capital Management primarily manages the broader market’s assets for endowments and foundations, utilizing a long/short equity strategy driven by fundamental analysis. The firm also explores risk arbitrage and event-driven investment opportunities when suitable.
Phillip Gross, more commonly known as Phill Gross, co-founded Adage Capital Management, L.P. in 2001 and serves as a Managing Director and Healthcare Portfolio Manager. Before establishing the firm, he spent 18 years at Harvard Management Company, Inc., where he held roles as a Healthcare and Retail Analyst, Equity Research Director, and Partner.
Gross earned both his B.S. in finance and economics in 1982 and M.S. in investments in 1983 from the University of Wisconsin. He previously served on the UW Foundation Board of Directors and is currently involved with the Steve Hawk Center for Applied Securities Analysis Advisory Board and the Nicholas Center for Applied Corporate Finance Advisory Board. In 2006, he was honored with the Distinguished Alumnus Award from the UW Business School.
In philanthropy, Gross co-founded Strategic Grant Partners, an initiative aimed at systemic change in education and family services in Massachusetts. He serves as Vice President of the Board of Directors for Youth Enrichment Services, a Boston-based organization that introduces urban youth to outdoor activities. Additionally, he is a Board Trustee of the U.S. Ski and Snowboard Association, vice-chair of its Investment Committee, and a board member of the T2 Foundation.
Adage Capital Management’s Q4 2024 13F filing reported $57.19 billion in managed 13F securities, with its top 10 holdings accounting for 31.7% of the total portfolio. This distribution highlights the firm’s diversified investment approach.
Our Methodology
The stocks discussed below were picked from Adage Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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 austin-distel on Unsplash
Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders as of Q4: 262
Adage Capital Management’s Equity Stake: $1.22 Billion
Meta Platforms, Inc. (NASDAQ:META) is making a significant push into AI hardware with its first in-house chip for training artificial intelligence systems, aiming to reduce dependence on Nvidia and lower infrastructure costs. The company has begun small-scale deployment of the chip and may expand production if tests succeed, marking a milestone in its long-term plan to develop custom silicon. Meta Platforms, Inc. (NASDAQ:META) has projected up to $119 billion in expenses for 2025, with AI infrastructure playing a major role. The new training chip is part of Meta’s ongoing Meta Training and Inference Accelerator (MTIA) program, which has had setbacks in the past but recently saw success with its first inference chip for recommendation systems. While Meta continues to be a major Nvidia customer, the push for in-house AI chips signals its ambition to take greater control over its AI ecosystem, particularly as skepticism grows over the long-term scalability of large language models.
Meta Platforms, Inc. (NASDAQ:META) has reinforced its dominance in digital advertising through rapid AI advancements, driving significant financial growth despite evolving industry regulations. In its Q4 2024 earnings report, the company posted a 21% year-over-year revenue increase to $48.4 billion, surpassing analyst expectations of $47 billion. Earnings per share (EPS) soared 50% to $8.02, well above the projected $6.76, leading to a nearly 9% rise in Meta’s stock price. The company’s AI-powered ad targeting and content recommendation systems have strengthened its market position, attracting increased ad spending and bolstering its competitive edge.
Investor confidence in Meta Platforms, Inc. (NASDAQ:META) continues to rise, with institutional backing growing substantially. Hedge fund interest also surged, with 262 funds holding stakes worth nearly $59.4 billion by the end of Q4 2024, up from 235 funds in the previous quarter, according to Insider Monkey’s database. Meta’s strong financials, AI-driven innovations, and unwavering dominance in digital advertising make it a top investment choice, as the company continues leveraging technology to maintain its industry leadership.
Overall, META ranks 6th on our list of top stocks to buy according to Adage Capital Management. While we acknowledge the potential for META as an investment, our conviction lies in the belief that some 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.
