Morgan Stanley’s Best Overweight & Quality Stocks: Top 25 Stocks

15. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders In Q2 2024: 219

Average Analyst EPS % Revision: 0.2%

Meta Platforms, Inc. (NASDAQ:META) is one of the biggest social media companies in the world. As of March, the firm had 3.2 billion people using its platform. This provides Meta Platforms, Inc. (NASDAQ:META)  with a sizeable moat as the firm is able to woo advertisers to its platform. In fact, advertising is the firm’s bread and butter as it accounted for $74 billion out of its $75 billion in revenue for the first half of 2024. Meta Platforms, Inc. (NASDAQ:META)’s sizeable resources, as evidenced by its $32 billion in cash and equivalents have also allowed it to invest heavily into artificial intelligence. It is among the handful of companies that have access to foundational AI models, allowing it to build a portfolio of AI products and services. Meta Platforms, Inc. (NASDAQ:META) is offering these to its advertisers and to its social media users, and given the billions it has spent on AI, monetization and profit from these services will prove to be a key driver of the social media company’s hypothesis.

Evercore’s Mark Mahaney is quite optimistic about Meta Platforms, Inc. (NASDAQ:META)’s ability to monetize AI. Here’s what he had to say during a recent talk with CNBC:

“If you look at what happened with Meta Platforms Inc (NASDAQ:META). they went to almost 30% revenue growth, they are growing dollar-wise faster than anybody else that’s because they used AI to rebuild their ad-tech stack because they used AI to rebuild their user interface and get us more engaged, so it actually worked for them.”