We recently compiled a list of the Billionaire Israel Englander’s Top 10 Stock Picks Heading Into 2025. In this article, we are going to take a look at where Meta Platforms Inc (NASDAQ:META) stands against the other stock picks.
Israel Englander has always inspired the investment world by founding and managing the second-most profitable hedge fund in history. The Brooklyn-born billionaire investor began his career on Wall Street in 1970. After gaining valuable experience in trading and investment management, he founded Millennium Management in 1989.
Millennium Management has become one of the world’s largest and most successful hedge funds, managing $210 billion in 13F securities as of Q3 2024. Innovative investment strategies and a focus on risk management are the tenets that have propelled the hedge fund to tremendous success. Since its inception, Englander’s hedge fund has averaged 14% in annual returns, solidifying its position in the highly competitive hedge fund landscape. The hedge fund has also racked up over $56 billion in cumulative profits for investors since its inception.
READ ALSO: 15 Stocks Targeted By Activist Hedge Funds and 10 Best Penny Stocks to Buy for 2025.
Millennium Management had its best year in 2000, when the dot-com bust started, and the S&P 500 was down 10%. Thanks to its multi-strategy approach, it returned 35%, which consistently produces positive returns. As the CEO, Englander only had one down year, a 3% decline at the height of the financial crisis in 2008. The impressive performance stems from the billionaire investor focusing on unique investment strategies emphasizing diversification and risk management. Likewise, Englander advocates for a multi-strategy approach that makes it easy to capitalize on various market opportunities.
Millennium Management’s diversification strategy was highlighted when they sold tech stocks to invest in an index fund, emphasizing long-term growth and risk mitigation. Israel Englander remains focused on expanding the firm and leveraging technology to stay competitive.
In 2023, Israel Englander topped Bloomberg’s list of highest-earning hedge fund managers with $2.8 billion in net earnings. Millennium Management earned $600 million from commodities last year but lagged behind Citadel’s $8 billion in 2022. Bloomberg cited sources saying Millennium’s struggles are due to Englander’s tight control. Financial Times reported Millennium manages $60 billion in assets, employs 5,400 people, and has 17 offices. The fund returned 8.3% in 2023, 12.5% in 2022, 13.6% in 2021, and 25.9% in 2020.
Millennium Management was one of the hedge funds that benefited from the overall stock market rally, with the S&P 500 gaining 24% in 2024 due to optimism around artificial intelligence and interest rate cuts. The hedge fund also benefited from its exposure to many of the ‘Magnificent 7’ stocks, which were behind much of the actions in 2024.
After two straight years of annual gains, the focus in the equity markets is on stocks that can maintain the upward momentum in 2025. Billionaire Israel Englander’s top stock picks are well poised to benefit from a strong US economy. While the billionaire investor’s portfolio consists of tech stocks, it also consists of investment plays in healthcare, industrials and materials sectors. With that, let’s take a look at some of his top stock picks.
Our Methodology
We analyzed Millennium Management’s portfolio to make a list of billionaire Israel Englander’s top 10 stock picks heading into 2025. We then settled on Englander’s top ten holdings and analyzed them to determine why they stand out in generating long-term value. We then ranked these companies in ascending order based on the hedge fund’s stake value.
At Insider Monkey, we are obsessed with 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 275% since May 2014, beating its benchmark by 150 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)
Millennium Management’s Stake Value: $765.77 Million
Number of Hedge Fund Holders: 235
Meta Platforms Inc (NASDAQ:META) is a communication services company that offers products that help people connect and share with friends and family. As the parent company behind Facebook, Instagram, WhatsApp and Messenger, it’s a market leader in the social networking space. The stock outperformed the overall market, rallying by 72% in 2024.
The rally came as the social networking giant emerged as one of the companies benefiting from the artificial intelligence revolution. The tech giant is increasingly leveraging artificial intelligence to boost engagement and user experience in its networking apps. In return, it has successfully attracted advertisers looking to target its massive consumer base.
Meta Platforms Inc (NASDAQ:META) is already a major player in the AI boom, which makes sense given that it is a huge company with almost 3.3 billion daily active users across its various social media platforms. 500 million people use the company’s Meta AI assistant each month. Advertisers aiming to reach a captive audience will find this more appealing.
Because of AI, its family of apps, Facebook, Instagram, and WhatsApp, has grown to be an extremely valuable digital real estate for advertisers. Instagram’s shift from gallery-style, standalone photos to short-form, scrolling videos has revolutionized Meta’s profits and cash flow.
Revenues in the first nine months of 2024 were up by 22%. Profitability has also improved. In the third quarter of 2024, Meta Platforms Inc (NASDAQ:META) reported an impressive operating margin of 43%.
Hardman Johnston Global Equity stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q3 2024 investor letter:
“During the quarter, we initiated one new position in Meta Platforms, Inc. (NASDAQ:META) and had no liquidations. Management at Meta has effectively addressed concerns about investment efficiency by shifting resources from Reality Labs towards broader AI initiatives with a clearer path to profitability. We believe management has successfully articulated the benefits of this strategy, highlighting how AI is driving user engagement and advertiser productivity. This, in turn, fuels continued revenue momentum and increases the likelihood of positive earnings surprises in the future. Additionally, the parent company of the social media platform, Facebook, has recently taken positive steps to enhance safety, which suggests to us a shift towards a more proactive and responsive approach to addressing important potential challenges and concerns. Weak oversight over data privacy protection was a key reason why we sold the position in the portfolio back in 2021. Removing this governance overhang allows us to feel comfortable to enter back into the stock at a time when we believe it is poised for strong earnings growth going forward.”
Overall META ranks 6th on our list of Billionaire Israel Englander’s top stock picks heading into 2025. While we acknowledge the potential of META as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than the ones mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
