1. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders as of Q4: 262
Lone Pine Capital’s Equity Stake: $1.19 Billion
Meta Platforms, Inc. (NASDAQ:META), a leading multinational technology conglomerate based in Menlo Park, California, operates major social media platforms such as Facebook, Instagram, Threads, and WhatsApp. The company reported outstanding Q4 2024 financial results, with revenue increasing 21% year-over-year to $48.4 billion, surpassing Wall Street’s $47 billion projection. Earnings per share (EPS) surged by 50% to $8.02, well above the expected $6.76, initially driving Meta’s stock up by nearly 9%, though some gains were later trimmed. The company’s digital advertising segment remains its primary revenue driver, bolstered by its advanced artificial intelligence (AI) tools that enhance content recommendations and ad targeting, further strengthening its competitive position.
Investor confidence in Meta Platforms, Inc. (NASDAQ:META) continues to rise, as institutional interest in the stock has grown significantly. By the end of Q4 2024, Lone Pine Capital held over 2 million shares valued at approximately $1.19 billion, making it one of Stephen Mandel’s top investment choices. Hedge fund interest has also surged, with 262 funds tracked by Insider Monkey collectively holding stakes worth more than $59.38 billion, up from 235 funds in the previous quarter. This increased institutional backing underscores strong expectations for Meta’s long-term growth, supported by its advancements in AI and its dominant position in the social media and digital advertising markets.
Meta Platforms, Inc. (NASDAQ:META) is rapidly expanding its digital advertising market share by leveraging AI-driven solutions, which contributed to a 22% revenue increase in 2024—double the industry’s growth rate. AI-powered tools have significantly improved ad targeting, creativity, and efficiency, leading to a 32% rise in advertiser return on investment (ROI) and a 17% reduction in customer acquisition costs. Advertiser adoption of Meta’s AI solutions has quadrupled in just six months, with ad prices rising 14% in Q4. As the company continues to develop AI innovations, such as video generation technology, and with the digital advertising market projected to reach $513 billion by 2027, Meta Platforms, Inc. (NASDAQ:META) is well-positioned for sustained growth in the coming years.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META): Investment Initiated: April 2018: Internal Rate of Return (IRR*): 22% *IRR represents the annualized rate of return on an investment, accounting for the timing and magnitude of cash flows over the holding period.
For META, our 22% IRR aligns closely with the company’s compounded growth in earnings per share (EPS) and free cash flow per share during the 6 years holding period.
Looking ahead, Meta is expected to grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years. There’s a good possibility that it could exceed these estimates, considering the breadth of growth initiatives currently in place, such as advancements in Al, monetization of Reels, expansion into business messaging, and the ongoing development of the metaverse…” (Click here to read the full text)
Overall, Meta Platforms, Inc. (NASDAQ:META) ranks first on our list of the top 10 stocks to buy according to Lone Pine Capital. While we acknowledge the potential for META as an investment, our conviction lies in the belief that some 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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