We recently published a list of Jim Cramer’s Latest Calls: 10 Stocks You Should Not Miss. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other Jim Cramer’s latest stock picks you shouldn’t miss.
Jim Cramer in a latest program on CNBC talked about earnings results from some of the top consumer and retail companies and said, as a compliment, that America has become a nation of “cheapskates” where consumers are unwilling to pay more when there’s little or no value.
“There’s something happening here, and what it is is exactly clear: we’ve become a nation of cheapskates. I say that as a compliment. Nobody gets away with charging too much anymore—not in this country, no matter the industry, perhaps even the drug industry. It’s happening now, it’s happening fast, and many companies are being left behind by the change. I see it everywhere I go—in the grocery store, online, in the mall, and, of course, in the stock market.”
Cramer talked about how restaurants that offer cheaper but quality meals are seeing a surge in their stock prices amid rising revenues. He also discussed how weight-loss drugs are impacting companies that sell alcohol products.
“American people are tired of paying up. They feel gou, they feel betrayed, they feel that the only thing about brand loyalty is that it isn’t worth a dime. They want a better deal. They’ll eagerly switch lifetime habits in order to save some money because prices are up so much that you feel like an idiot if you’re paying up.”
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For this article we watched latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s talking about. With each company we have mentioned the number of hedge fund investors. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Meta Platforms Inc (NASDAQ:META)
Number of Hedge Fund Investors: 219
Jim Cramer in a latest program on CNBC talked about the latest bull case thesis on Meta Platforms Inc (NASDAQ:META) from Michael Nathanson of MoffettNathanson, who recommended the stock at the current levels. Cramer said he agrees with the analyst.
Michael Nathanson said the following about Meta Platforms Inc (NASDAQ:META) in a latest interview with CNBC:
“Meta, their core business is really getting the benefit of AI. You see it in their ad numbers; they’re accelerating. Their engagement is doing really, really well, so they definitely have momentum behind their business. And they’ve beat our numbers all year long.”
Despite posting strong quarterly results, Meta Platforms (NASDAQ:META) shares fell as rising AI-related expenses yet again spooked investors about ROI. However, Meta platforms (NASDAQ:META) bulls believe Zuckerberg’s plan to keep spending on AI is totally justified.
Meta Platforms (NASDAQ:META) is driving usage and ads revenue by improving its algorithms and user experience thanks to AI. Meta also reported strong adoption of its Llama AI model, attracting over 500 million monthly active users across its platforms. This progress positions Meta well for robust profitability in the next two years as it scales its AI infrastructure.
Meta Platforms (NASDAQ:META)’s advancements in Reels and WhatsApp are helping manage CapEx growth as the company strives to stay competitive in AI.
Meta Platforms (NASDAQ:META)’s clear monetization strategy for its generative AI, especially with Llama3, makes it a strong contender against rivals like OpenAI’s ChatGPT. Meta Platforms (NASDAQ:META)’s substantial user base of 3.3 billion provides a data and distribution edge that could capture a significant share of the GenAI market. Although short-term investors may be concerned about Meta Platforms (NASDAQ:META)’s increased AI spending, its forward P/E ratio of 24x, based on FY 2025 EPS estimates of $24.62, makes it the second-most affordable big tech stock, after Google, within its peer group (Apple, Amazon, Microsoft, and Google).
According to some estimates, Meta Platforms (NASDAQ:META) is on track to potentially achieve $25-26 per share in EPS next year, slightly above the consensus estimate. Factors such as a strong U.S. economy, lower inflation, favorable online ad pricing, and AI investments could fuel earnings growth. If Meta’s valuation aligns with the industry average P/E of 26.6x, shares could reach over $600.
Baron Opportunity Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q3 2024 investor letter:
“Shares of Meta Platforms, Inc. (NASDAQ:META), the world’s largest social network, were up this quarter, due to impressive top-line growth of 22% year-over-year and solid forward guidance. Despite its large scale, Meta continues to outgrow the broader digital advertising industry, with better AI-driven content recommendations increasing engagement in products like Instagram Reels, and AI improving ad targeting and conversion rates. Our industry checks have continued to validate advertiser adoption and satisfaction, with improvements in Reels monetization, as well as strong adoption of Advantage+, Meta’s AI-driven service to allocate advertiser budgets across its content surfaces.
Meta continues to innovate in Gen AI, with a leading AI research lab and the best open-source models to date. We believe CEO Mark Zuckerberg’s open-source approach will encourage a broader developer ecosystem and standardization based on Meta, which will be beneficial for the company even if Meta doesn’t directly monetize model usage over the near term. In a blog this summer, titled “Open Source AI Is the Path Forward,” Zuckerberg laid out his case:…” (Click here to read the full text)
Overall, META ranks 1st on our list of Jim Cramer’s latest stock picks you shouldn’t miss. While we acknowledge the potential of META, our conviction lies in the belief that under the radar 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.