We recently published a list of 10 Best Major Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other best major stocks to buy according to hedge funds.
After a notable growth of 25% for the broader market in 2024, the S&P 500 index gained a little under 4% in the first month of 2025. The stock market had a mixed start to 2025 after the U.S. tech companies took a massive hit from the launch of Deepseek’s R1 AI model. Despite a major blow, the tech-heavy NASDAQ 100 index has gained over 4.50% year-to-date.
READ ALSO: 10 Large-Cap Stocks Insiders Are Selling Recently
Inflation and Tariff Concerns
U.S. stocks fell on February 12 following the release of January inflation data. The consumer-price index (CPI) soared 3% in January from a year ago, exceeding economists’ estimates. The data has somewhat stoked investors’ concerns about price pressures and the worry that interest rates might not come down as expected.
January CPI usually indicates big price adjustments made by businesses at the start of the year. Moreover, the beginning of a new administration has an impact on businesses. According to Goldman Sachs Research’s chief US equity strategist David Kostin, every five-percentage-point increase in the US tariff rate is estimated to reduce S&P 500 EPS by roughly 1-2%.
Therefore, if the U.S. administration sustains the proposed tariff rates, a 25% tariff on imported goods from Mexico and Canada and an additional 10% tariff on imports from China would reduce S&P 500 EPS forecasts by nearly 2-3%, as per Goldman’s Research.
However, the tariff policy doesn’t slow down the AI investment by the U.S. tech giants as they continue to expand their AI-related services and products. Four out of the Big Five companies are projected to invest over $300 billion in 2025 building data centers to fuel the AI boom.
Our Methodology
We have listed the top 10 best major stocks based on hedge fund sentiment, according to Insider Monkey’s database. The best major stocks are ranked in ascending order of the number of hedge fund holders, as of Q3 2024.
Why do we care about what hedge funds do? 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).
Photo by Timothy Hales Bennett on Unsplash
Meta Platforms, Inc. (NASDAQ:META)
No. of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) is a global technology company that connects people and shares, finds communities and grows businesses. The company owns Instagram, Whatsapp, Facebook, Messenger, and Thread applications.
On February 11, Tigress Financial analyst Ivan Feinseth upgraded the price target on META shares from $645 to $935 and kept a Strong Buy rating on the shares. The analyst keeps a strong buy rating as Meta is exploring AI-driven opportunities for its social media platforms. Feinseth sees a significant upside, driven by the company’s ongoing potential to monetize many of its critical applications and technologies.
Meta Platforms, Inc. (NASDAQ:META) has made an accounting shift which is expected to reduce its depreciation expense by $2.9 billion in 2025. This will increase the company’s estimated pre-tax profits by 4% for 2025. Moreover, the company is planning to spend over 75% on capital expenditures to enhance its AI capabilities.
Overall, META ranks 3rd on our list of best major stocks to buy according to hedge funds. While we acknowledge the potential of META to grow, 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.
