3. Meta Platforms Inc (NASDAQ:META)
Number of Hedge Fund Holders: 219
Meta Platforms Inc (NASDAQ:META) ranks third on our list of the safest stocks to invest in. Meta Platforms Inc (NASDAQ:META), commonly referred to as Meta and formerly known as Facebook, is a technology conglomerate behind the leading social media platforms such as Facebook, Instagram, Threads, and WhatsApp. The company currently boasts a user base of 3.27 billion daily active users across all its social media platforms, up by 7% year-over-year.
Meta Platforms Inc (NASDAQ:META) is making incredible feats in artificial intelligence. During the second quarter, the company launched its AI Studio in the United States, a platform for people to create, share, and discover artificial intelligence models. Users can use the studio to create characters and reach a wider audience. The characters are customizable and can be used by creators as an extension of themselves, hereby enhancing direct interactions with viewers.
Meta Platforms Inc (NASDAQ:META) has a strong position in the market, making it one of the safest stocks in the market right now. By 2026, the company expects to own the best recommendation technology on its social media platforms. Meta Platforms Inc (NASDAQ:META) is achieving this by expanding its collection of open models and tools for generative artificial intelligence. As of today, Meta’s video-enhancing tools have increased private sharing across apps by more than 80% year-over-year, making it easier for people to find, explore, and consume media.
Overall, Meta Platforms Inc (NASDAQ:META) reported $39.1 billion in revenue, in the second quarter of 2024, up by 22% year-over-year. The company also generated $10.9 billion in free cash flow supporting its dividend payouts and stock repurchases. With strong expectations ahead of 2024, the company projects revenue to reach $38.5 billion in the third quarter of 2024.
META is currently trading at 25 times this year’s earnings estimate and the sector forward P/E is 13. While META is trading at a higher multiple, its earnings are expected to grow by 43% this year to $21.2.
Mar Vista Focus strategy stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter:
“During the quarter, we established new investments in Broadcom and Meta Platforms, Inc. (NASDAQ:META). We previously divested from Meta during a period of stagnant advertising growth and the company’s initial, significant investment in the metaverse project. At that time, investors appeared complacent to the risks associated to an increasingly competitive landscape, and the Street’s robust financial expectations as the company transitioned towards monetizing short-format video (Reels). The subsequent decline in Meta’s stock price during 2022 reflected these concerns.
Since then, Meta has demonstrably shifted its strategic focus. The company has prioritized operational efficiency, implemented strategies to monetize Reels effectively, and initiated a robust artificial intelligence (AI) development program. We believe the focus on AI represents a more prudent capital allocation strategy compared to the earlier metaverse initiative. Meta AI holds significant potential to unlock substantial monetization opportunities and enhance user engagement, while maintaining tight controls on operating costs…”(Click here to read the full text)
