1) Meta Platforms, Inc. (NASDAQ:META)
% Gain on a YTD Basis: ~70%
Number of Hedge Fund Holders: 219
Given Meta Platforms, Inc. (NASDAQ:META)’s network effects regarding the massive user base, and its intangible assets consisting of a collection of data users have shared on the company’s sites and apps, it is well-positioned to sustain its growth trajectory. The company’s capability to profitably monetize its network via advertising should help it generate excess returns on capital for the foreseeable future. Meta Platforms, Inc. (NASDAQ:META)’s AI-powered products, such as Ray-Ban Meta Glasses and Quest 3 headset, continue to see healthy demand, exceeding the anticipations. Wall Street believes that its partnership with EssilorLuxottica should drive future generations of AI glasses.
Meta Platforms, Inc. (NASDAQ:META) continues to focus on AI to enhance user experiences and drive engagement. Also, it has plans to develop a unified recommendation system and AI-generated creative for advertisers. It plans to scale Gen AI training capacity and build infrastructure for directing training capacity. Overall, investments in the metaverse, AI, and digital advertising should act as tailwinds.
Meta Platforms, Inc. (NASDAQ:META) focuses on improving the shopping experience on platforms and monetizing assets such as Marketplace. It has been building out capacity for AI training and is considering expected use cases for data centers. Given its solid financial foundation and a strong focus on innovation, the company is well-placed to remain at the forefront of the tech sector.
Cantor Fitzgerald reiterated an “Overweight” rating on the shares of Meta Platforms, Inc. (NASDAQ:META), setting a $660.00 target price on 7th October. Rowan Street Capital released its second-quarter 2024 investor letter. Here is what the fund said:
“We are pleased to report that Meta Platforms, Inc. (NASDAQ:META), our largest position in the fund, has delivered a remarkable performance, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, equating to a 20% annualized return.
We would like to remind you that achieving these types of returns is never a straight path. From time to time, we might experience volatility — that’s simply part of the investment journey. In fact, wealth creation and volatility go hand in hand. There’s no escaping it; it’s the “price of admission” the market demands. If you take a look at the chart below, you’ll notice the drawdowns META stock has faced over the years, with 2022 standing out as a particularly challenging period, where the stock saw a 75% drop…” (Click here to read the full text)
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 META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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