We recently published a list of the 13 NASDAQ Stocks with the Highest Upside Potential. In this article, we are going to take a look at where Meta Platforms Inc. (NASDAQ:META) stands against other NASDAQ stocks with high upside potential.
On April 7, Dan Ives of Wedbush Securities joined CNBC’s ‘Squawk on the Street’ to discuss how the current tariff environment could impact tech supply chains. Musk’s actions and Trump’s tariffs have contributed to broad economic uncertainty, which Ives also referred to as the economic Armageddon for US tech in an earlier conversation. He expressed concern about the structural supply chain challenges posed by recent tariffs and geopolitical tensions. Ives highlighted that the US tech sector has historically maintained an edge over China but this could be wiped out if manufacturing were relocated to the US. The logistical hurdles of building manufacturing plants in the US are not negligible and it would take 4 to 5 years to establish facilities capable of sustaining production levels comparable to those in Asia.
He also acknowledged that he hasn’t downgraded major stocks like the ones in MAG7 but remains cautious. If these previously highlighted issues persist for months, Ives anticipates drastic cuts in earnings. This uncertainty surrounding tariffs could lead to lower demand for emerging technologies like AI and cybersecurity. He explained that this situation could severely impact the US tech companies and lead to broader cuts across the tech sector — potentially up to 25% in earnings. He also criticized Elon Musk’s political involvement, which he believes has caused permanent damage to his brand and customer base. He estimated a 20% demand destruction in Europe and 10% in the US.
Our Methodology
We used the Finviz stock screener to select the 13 stocks with the highest analysts’ upside potential (at least 35%) as of April 8. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s 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).
A team of developers working in unison to create the company’s messaging application.
Meta Platforms Inc. (NASDAQ:META)
Average Upside Potential as of April 8: 49.15%
Number of Hedge Fund Holders: 262
Meta Platforms Inc. (NASDAQ:META) helps people connect and share with friends and family through its Family of Apps (FoA) and Reality Labs (RL) segments. FoA offers Facebook, Instagram, Messenger, Threads, and WhatsApp. Whereas RL provides virtual, augmented, and mixed reality-related products which include consumer hardware, software, and content.
On April 3, Brad Erickson of RBC Capital set a price target of $740 on the company while reiterating a Buy rating because of the optimism surrounding the company’s growing market share in digital advertising. The analyst anticipates the company’s gain in the ad market to increase in 2025, making a comparison of Meta Platforms Inc. (NASDAQ:META) with Google.
This is reflected in the company’s Q4 2024 performance. The total FoA revenue surged by 21% in this quarter, whereas ad revenue for this segment alone rose by the same percentage. FoA recorded $47.3 billion in Q4 revenue, whereas FoA ad revenue generated $46.8 billion in the same period. Additionally, the total number of ad impressions increased by 6%, while the average price per ad rose by 14%. The company is further improving its revenue performance through better monetization efficiency.
Nightview Capital highlighted the company’s strong growth potential, due to its AI leadership with Llama model, advertising ecosystem, and AR capabilities. It stated the following regarding Meta Platforms Inc. (NASDAQ:META) in its Q4 2024 investor letter:
“Core Opportunity: Meta Platforms, Inc.’s (NASDAQ:META) platforms—Instagram, Facebook, WhatsApp, and Messenger—reach nearly half the world’s population daily, making it one of the most powerful advertising ecosystems globally. With investments in AI and augmented reality (AR), we believe Meta is also creating significant optionality for long-term growth.
Competitive Advantage: Thriving Core Platforms: In Q3, we saw Meta achieve a 23% YoY revenue growth,—a testament to strong user engagement across its ecosystem. The advertising landscape as a whole continues to evolve and we believe Meta’s existing platforms offer a defined advantage in this new world. Existing platforms in the age of AI continue to be the most powerful indicator of future success in our opinion.
AI Leadership: Meta’s AI capabilities and the Llama AI model are driving efficiency and product innovation. In our view, these assets have been under-appreciated by the market while enhancing Meta’s ability to further scale and innovate its leading advertising business…” (Click here to read the full text)
Overall, META ranks 8th on our list of NASDAQ stocks with the highest upside potential. 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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.
