In this article, we will take a detailed look at the Top 10 Stocks to Buy According to Lone Pine Capital.
Lone Pine Capital, established in 1997 by Stephen Mandel, is a leading hedge fund and investment advisory firm based in Greenwich, Connecticut. The firm also operates offices in major financial hubs, including London, New York City, and San Francisco. Over the years, Lone Pine Capital has built a strong reputation in the investment world, focusing on long-term growth strategies. The firm’s disciplined approach to stock selection and asset management has enabled it to maintain a significant presence in the hedge fund industry.
Stephen Mandel, the founder of the firm, has had an extensive career in finance even before launching Lone Pine Capital. He previously worked as a managing director at Tiger Management, gaining valuable experience in investment strategy. A graduate of Dartmouth College with a degree in government, Mandel later earned an MBA from Harvard University. His expertise and leadership led to his ranking in the highest-earning categories among Forbes’ top hedge fund managers multiple times between 2012 and 2018. Although Mandel stepped away from active investment management in 2019, he continues to serve as a managing director at the firm. As of Q4 2024, Lone Pine Capital managed nearly $13.5 billion in 13F securities spread across 30 companies, with its top 10 holdings accounting for 55.89% of its portfolio.
Lone Pine Capital’s investment philosophy is rooted in identifying transformative changes that can unlock or accelerate value. By leveraging institutional knowledge and deep expertise across sectors and global markets, the firm continuously reassesses its investment theses and uncovers new opportunities. It strategically times market entry by recognizing key turning points in economic and industry cycles, allowing it to capitalize on shifts before they become widely apparent. The firm also prioritizes long-term value creation, typically holding investments for two to three years, though it has held stocks of certain companies for decades. This disciplined approach aligns investment timelines with investor expectations, optimizing returns. Additionally, Lone Pine Capital remains highly responsive to innovation in various forms—whether through technological advancements, business model evolution, or leadership changes—adapting its strategies based on emerging data and shifting market dynamics.
Moreover, the hedge fund’s investment strategies are designed to achieve long-term capital appreciation through a disciplined and research-driven approach. For its long-only strategy, the firm focuses on high-conviction investments in companies with strong growth potential, maintaining a diversified portfolio primarily across North America and Europe while limiting exposure to emerging markets. Its long/short equity strategy follows a similar approach, combining concentrated long positions with a diversified selection of short investments to navigate market fluctuations effectively. Net exposure varies based on market conditions and available opportunities, ensuring flexibility in positioning. In private investments, the firm applies its extensive research capabilities to identify promising companies in sectors such as software, financial technology, healthcare, and consumer markets. By targeting capital-efficient businesses with significant public market potential, Lone Pine Capital seeks to maximize returns through selective, high-impact investments.
Stephen Mandel of Lone Pine Capital
Our Methodology
The stocks discussed below were picked from Lone Pine Capital’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1008 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Top 10 Stocks to Buy According to Lone Pine Capital
10. KKR & Co. Inc. (NYSE:KKR)
Number of Hedge Fund Holders as of Q4: 83
Lone Pine Capital’s Equity Stake: $598.76 Million
KKR & Co. Inc. (NYSE:KKR), a global leader in private equity and investment management, recently reported a mixed fourth-quarter performance, with assets under management rising 15% to $638 billion yet falling short of analyst expectations of $643.4 billion. This shortfall led to an 8.5% drop in KKR’s stock price, despite an impressive 78.5% gain in 2024. Analysts suggest the decline may be driven by concerns over slowing growth and profit-taking following the stock’s strong performance. KKR & Co. Inc. (NYSE:KKR) remains optimistic about its long-term trajectory, setting a target of surpassing $1 trillion in assets within the next five years. Despite challenges, KKR’s capital markets division performed well, generating $270 million in transaction fees for the quarter, primarily from private equity and infrastructure investments. For the full year, the division achieved a milestone, bringing in $1 billion in revenue for the first time.
KKR & Co. Inc. (NYSE:KKR)’s financial performance was impressive for Q4 2024, with adjusted net income surging 33% to $1.19 billion, or $1.32 per share, surpassing estimates of $1.28 per share. The firm’s infrastructure funds posted a 2% gain, while its opportunistic real estate funds rose 1%. However, its private equity portfolio remained flat in the fourth quarter, reflecting some challenges in the broader investment landscape. The company remains well-positioned for future growth, as analysts highlight a more favorable business environment under the Trump administration, which could facilitate deal-making and investment exits. Despite recent volatility, KKR’s track record of strong returns and strategic asset allocation continues to support its long-term outlook.
Looking ahead, KKR & Co. Inc. (NYSE:KKR) plans to expand its stakes in USI Insurance Services, 1-800 Contacts, and Heartland Dental, with a combined investment of approximately $1.1 billion. The firm now anticipates generating over $350 million in operating earnings from this unit by 2026, with annual projections exceeding $1.1 billion by 2030. In recent months, the company has actively pursued new opportunities, including the acquisition of a 25% stake in Italian energy giant Eni’s biofuel business, Enilive, for 2.94 billion euros, further strengthening its diverse portfolio.
Vulcan Value Partners stated the following regarding KKR & Co. Inc. (NYSE:KKR) in its Q4 2024 investor letter:
“During the quarter, we sold KKR & Co. and InterContinental Hotels Group. We owned KKR & Co. Inc. (NYSE:KKR) for over six years. During that time, the company converted from a publicly traded partnership to a C corp, and both its value and stock price compounded at strong mid double-digit rates. KKR’s stock price reached our estimate of fair value and following our discipline, we sold it because we no longer had a margin of safety and reallocated capital into more discounted companies with attractive margins of safety.”
9. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders as of Q4: 115
Lone Pine Capital’s Equity Stake: $604.37 Million
Founded in 1876, Eli Lilly and Company (NYSE:LLY) is an American multinational pharmaceutical company headquartered in Indianapolis, Indiana, with a global presence in 18 countries. Its products are distributed in approximately 125 countries, reflecting its global reach. Alongside pioneering pharmaceutical advancements, the company emphasizes inclusive clinical trials and is committed to ensuring its medicines are both accessible and affordable for diverse populations. Eli Lilly and Company (NYSE:LLY) is a recent addition to Stephen Mandel’s portfolio, with the hedge fund acquiring shares for the first time in Q4 2024. Despite being a new holding, Lone Pine Capital invested significantly, purchasing 782,860 shares valued at over $604 million, making it the ninth most valuable position in the fund’s 13F holdings for the quarter ending in December 2024.
On February 6, 2025, Eli Lilly and Company (NYSE:LLY) reported its fourth-quarter 2024 financial results, highlighting strong revenue growth and a positive long-term outlook. CEO David A. Ricks emphasized the company’s success in advancing treatments for chronic diseases associated with obesity, expanding manufacturing capacity, and launching key products like Kisunla and Ebglyss, which are expected to drive sustained growth. The company’s fourth-quarter revenue surged 45% year-over-year to $13.53 billion, primarily fueled by increased sales volume of Mounjaro and Zepbound. Earnings per share (EPS) more than doubled, rising 114% to $5.32. Looking ahead, Lilly projects 2025 revenue between $58.0 billion and $61.0 billion, with EPS estimated in the range of $22.05 to $23.55, reinforcing confidence in its financial trajectory and continued innovation.
Insider Monkey’s database indicated that 115 hedge funds held stakes in Eli Lilly and Company (NYSE:LLY) at the end of Q4 2024, with a value of nearly $16.65 billion, as opposed to 106 funds in Q3. The company’s strong financial performance underscores its ability to capitalize on high-demand treatments while successfully launching new products. Additionally, the company’s appeal among institutional investors is evident, as hedge fund interest grew significantly in Q4 2024, demonstrating confidence in its long-term growth potential and innovative pharmaceutical pipeline.
8. LPL Financial Holdings Inc. (NASDAQ:LPLA)
Number of Hedge Fund Holders as of Q4: 65
Lone Pine Capital’s Equity Stake: $627.80 Million
Based in San Diego, California, and founded in 1989 through the merger of two small brokerage firms, LPL Financial Holdings Inc. (NASDAQ:LPLA) is particularly known for being the largest independent broker-dealer in the US. The company delivered a strong fourth-quarter performance in 2024, with net income rising 24% year-over-year to $270.75 million and EPS increasing 21% to $4.25. The firm’s financial strength was further reflected in a 22% growth in gross profit to $1.228 billion and adjusted EBITDA reaching $585 million. Total advisory and brokerage assets expanded 29% year-over-year to $1.7 trillion, fueled by a record $68 billion in organic net new assets. Additionally, LPL Financial Holdings Inc. (NASDAQ:LPLA) successfully attracted $79 billion in recruited assets and increased its advisor headcount by over 5,200, bolstered by the integration of Prudential Advisors’ assets. For the full year, net income reached $1.1 billion, with an EPS of $14.03, reflecting steady long-term growth. Looking ahead, the company plans to drive expansion through strategic acquisitions while maintaining cost discipline, with a declared dividend of $0.30 per share set for distribution in March 2025.
In the fourth quarter of 2024, Lone Pine Capital held over 1.92 million shares in LPL Financial Holdings Inc. (NASDAQ:LPLA), which were valued at almost $627.80 million and represented 4.66% of the fund’s portfolio.
Over the past three months, LPL Financial Holdings Inc. (NASDAQ:LPLA) stock has surged 14.5%, outperforming the broader market, and its key competitors like The Charles Schwab Corporation. The company’s growth is fueled by strategic acquisitions, including Atria Wealth Solutions in October 2024 and Crown Capital’s wealth management business in May 2024, strengthening its presence in the wealth management sector. Supported by a strong balance sheet, LPL Financial Holdings Inc. (NASDAQ:LPLA) continues to leverage strategic buyouts to drive revenue growth, diversify its offerings, and expand its global footprint.
7. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders as of Q4: 317
Lone Pine Capital’s Equity Stake: $691.13 Million
As of Q4 2024, 317 out of 1,008 funds tracked by Insider Monkey held shares in Microsoft Corporation (NASDAQ:MSFT) that were collectively worth nearly $91.24 billion by the end of the quarter, up from 279 funds in Q3. This heightened institutional interest reflects confidence in Microsoft’s long-term growth prospects and market dominance. The company’s strong financial performance further reinforces its appeal, with Q4 2024 revenue reaching $69.63 billion, surpassing market expectations of $68.81 billion and representing a 12.27% year-over-year increase. Earnings per share (EPS) also exceeded analyst projections, coming in at $3.23, marking a 3.5% beat.
Beyond financial strength, Microsoft Corporation (NASDAQ:MSFT) continues to push the boundaries of innovation. In February 2025, the company announced a major breakthrough in quantum computing with the development of a topological qubit, a technological milestone that could revolutionize artificial intelligence, medicine, and cryptography. While skepticism remains regarding the qubit’s immediate impact, this advancement places Microsoft at the forefront of global quantum research.
Despite its strong position, Microsoft Corporation (NASDAQ:MSFT) faces challenges in the evolving AI landscape. Veteran stock analyst Helene Meisler noted that the company’s aggressive investment in AI infrastructure has led to significant spending on high-performance servers from suppliers such as Super Micro and Dell. While this aligns with the AI boom, concerns are growing that demand may decelerate, leaving Microsoft with excess capacity. In 2024, AI-driven stock rallies benefited from expectations of Federal Reserve rate cuts, which facilitated corporate borrowing and investment. However, as inflation rises and anticipated rate cuts diminish, combined with the emergence of competitors like DeepSeek offering cost-efficient AI solutions, investors are questioning whether AI spending will require recalibration. This uncertainty has contributed to the recent stagnation of Microsoft’s stock price.
Despite these concerns, Microsoft Corporation (NASDAQ:MSFT) remains an attractive investment due to its strong financial performance, technological leadership, and dominance in AI and cloud computing. The company’s continued innovation in quantum computing, coupled with its ability to integrate AI into enterprise solutions, positions it for sustained long-term growth.
6. Intuit Inc. (NASDAQ:INTU)
Number of Hedge Fund Holders as of Q4: 89
Lone Pine Capital’s Equity Stake: $727.02 Million
A global leader in financial software solutions, Intuit Inc. (NASDAQ:INTU) is headquartered in Mountain View, California, and led by CEO Sasan Goodarzi. The company’s stock surged 5% following its fiscal Q2 2025 earnings report, which exceeded Wall Street expectations across all key metrics. The company, known for products like TurboTax, QuickBooks, and Credit Karma, posted earnings per share (EPS) of $3.32, surpassing analyst estimates of $2.58. Its revenue reached $3.96 billion, beating projections of $3.83 billion and reflecting a 17% year-over-year increase. Management highlighted the company’s growing use of artificial intelligence (AI) to enhance customer experience and efficiency, with CFO Sandeep Aujla expressing confidence in delivering double-digit revenue growth and improved margins for the year. Additionally, the company’s board approved a quarterly dividend of $1.04 per share, a 16% increase from the previous year, payable on April 18, 2025.
For fiscal year 2025, Intuit Inc. (NASDAQ:INTU) reaffirmed its optimistic outlook, expecting revenue between $18.16 billion and $18.35 billion, reflecting 12-13% growth. The company’s operating income is projected to grow 28-30%, while its diluted EPS is forecasted at $19.16 to $19.36, a 13-14% increase. It also provided guidance for Q3 2025, expecting revenue between $7.55 billion and $7.60 billion, with EPS ranging from $10.89 to $10.95. These strong forecasts reinforce the company’s continued growth trajectory, fueled by its AI-driven platform and strategic focus on financial technology innovation.
As of Q4 2024, Lone Pine Capital significantly increased its holdings in Intuit Inc. (NASDAQ:INTU) to over 1.15 million shares, marking a 26% rise from 921,361 shares in Q3. The fund’s stake in the company is now valued at approximately $727 million. Insider Monkey’s database indicated that 89 hedge funds held stakes in the company at the end of Q4 2024, with a value of nearly $11.28 billion, as opposed to 87 funds in Q3.
5. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders as of Q4: 120
Lone Pine Capital’s Equity Stake: $738.01 Million
Vistra Corp. (NYSE:VST), a major integrated retail electricity and power generation company, reported strong financial and operational performance for 2024, supported by its diverse energy portfolio, including natural gas, nuclear, coal, solar, and battery storage facilities. For the quarter ending December 2024, the company achieved a net income of $490 million. It reported $4.56 billion in cash flow from operations for the year ended December 2024. Net income from ongoing operations stood at $2.93 billion, while ongoing operations adjusted EBITDA reached $5.66 billion, surpassing the midpoint of its initial guidance by $856 million, underscoring Vistra’s strong financial position and effective execution of its strategic initiatives.
Vistra Corp. (NYSE:VST) reaffirmed its 2025 financial guidance, projecting ongoing operations adjusted EBITDA between $5.5 billion and $6.1 billion, along with adjusted free cash flow before growth (FCFbG) ranging from $3.0 billion to $3.6 billion. The company has secured hedging for nearly all its anticipated generation volumes for 2025 and approximately 80% for 2026, reinforcing its confidence in meeting these targets. Additionally, it reiterated its 2026 adjusted EBITDA midpoint opportunity, expected to exceed $6.0 billion, reflecting its strategic approach to risk management and long-term financial stability. With strong cash flow generation, effective hedging strategies, and a positive earnings outlook, Vistra presents a compelling investment opportunity for those seeking exposure to the energy sector.
During the February 27, 2024, earnings call, Vistra Corp. (NYSE:VST) President and CEO Jim Burke highlighted the company’s record-breaking and transformational year, attributing its success to the dedication and expertise of its workforce. Over the past 12 months, the company completed a major acquisition, adding three nuclear sites, nearly one million retail customers in the PJM market, and 2,000 new employees, positioning itself as the second-largest competitive nuclear operator in the U.S. Additionally, Vistra expanded its renewable energy footprint by launching two solar-plus-storage facilities and securing two major power purchase agreements. Burke emphasized that these achievements reflect the strength of the company’s integrated business model; with a solid foundation and strategic alignment with industry electrification trends, Vistra Corp. (NYSE:VST) is well-positioned to execute its 2025 priorities and sustain long-term value for shareholders.
Carillon Eagle Mid Cap Growth Fund stated the following regarding Vistra Corp. (NYSE:VST) in its Q3 2024 investor letter:
“Vistra Vistra Corp. (NYSE:VST) is an integrated retail electricity and power generation company. As an independent power producer (IPP), Vistra primarily generates revenue from selling its generated power at the prevailing market price. As a result of recent growth in future power demand, the company’s shares have soared on investors’ expectations for future power prices. The potential for Vistra to announce future power purchase agreements (PPAs) with large technology companies in order to satisfy the extraordinary power requirements of these companies’ artificial intelligence (AI) endeavors, in a similar manner to some of Vistra’s closest IPP peers, has also provided a tailwind for the stock.”
4. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders as of Q4: 186
Lone Pine Capital’s Equity Stake: $742.65 Million
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a leading multinational semiconductor company based in Taiwan, specializing in contract manufacturing and design. The company generates revenue through the sale of semiconductor wafers, foundry services, and customized solutions, catering to a diverse range of clients. TSMC also operates internationally through subsidiaries such as WaferTech in the United States and TSMC China Company Limited, reinforcing its global presence and expanding its market reach.
Several analysts have recently weighed in on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Barclays increased its price target from $240.00 to $255.00, maintaining an “Overweight” rating in a report issued on January 17th. The stock currently holds a consensus rating of “Moderate Buy” with an average price target of $220.00.
TSM has a price-to-earnings (P/E) ratio of 27.66, a price/earnings-to-growth (PEG) ratio of 0.66, and a beta of 1.06, indicating moderate volatility. Financially stable, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) maintains a debt-to-equity ratio of 0.24, a quick ratio of 2.30, and a current ratio of 2.57. Over the past year, TSMC’s share price has fluctuated between a low of $125.78 and a high of $226.40, reflecting strong investor interest and growth potential.
The company’s dominant position in the semiconductor industry, combined with its global expansion through key subsidiaries, ensures a steady revenue stream and long-term growth potential. Additionally, strong analyst ratings, a solid financial foundation, and increasing price targets highlight its resilience and attractiveness as a top investment choice in the tech sector.
Baron Emerging Markets Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q4 2024 investor letter:
“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) contributed in the fourth quarter due to a cyclical recovery in semiconductors and significant incremental demand for AI chips. We retain conviction that TSMC’s technological leadership, pricing power, and exposure to secular growth markets, including AI/high-performance computing, automotive, 5G, and internet of things, will allow the company to sustain strong double-digit earnings growth over the next several years.”
3. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders as of Q4: 102
Lone Pine Capital’s Equity Stake: $778.47 Million
On February 6, 2025, Philip Morris International Inc. (NYSE:PM) posted its financial results for the quarter ending December 2024, with net sales surging 7.3% year over year to $9.71 billion compared with estimates of $9.44 billion, thanks to strong growth from its products ZYN and IQOS. Moreover, earnings per share increased 14% year-over-year to $1.55 against analysts’ expectations of $1.50 per share. Additionally, the company declared a regular quarterly dividend of $1.35 per share, or an annualized $5.40 per share, reflecting its commitment to shareholder value. These results reinforce Philip Morris’ dominant position in the tobacco industry.
Philip Morris International Inc. (NYSE:PM) projected stronger-than-expected profit growth for 2025, driven by the rapid expansion of its nicotine pouch brand, ZYN, and increasing demand for smoke-free alternatives. The company’s shares surged nearly 10% following the announcement. As consumers seek alternatives to traditional cigarettes due to health concerns, PMI’s heated tobacco device, IQOS, and ZYN have gained significant traction. The U.S. Food and Drug Administration recently granted PMI authorization to market ZYN in the country, citing its lower levels of harmful substances compared to traditional tobacco products. Chief Financial Officer Emmanuel Babeau emphasized that all three business segments—ZYN, IQOS, and traditional cigarettes—will contribute to growth in 2025, bolstering both revenue and profitability.
Philip Morris International Inc. (NYSE:PM), which distributes Marlboro cigarettes globally, expects adjusted annual earnings per share between $7.04 and $7.17, surpassing analysts’ estimates of $7.03. The company also anticipates a significant rise in ZYN shipments to the U.S., its largest market, with an estimated increase of 34% to 41%, while IQOS shipments are expected to grow by 10% to 12%. Barclays analyst Gaurav Jain noted that PMI’s projections for profits, sales volume, and revenue exceeded expectations, reinforcing investor confidence. Historically, the company has been conservative in its forecasts early in the year, leading investors to speculate on potential upward revisions as the year progresses, contributing to the stock’s strong performance.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders as of Q4: 339
Lone Pine Capital’s Equity Stake: $831.28 Million
As of Q4 2024, Lone Pine Capital held 3.79 million shares of Amazon.com, Inc. (NASDAQ:AMZN), valued at over $831 million. Hedge fund interest in the company also increased, with 339 funds tracked by Insider Monkey holding positions worth nearly $69.04 billion by the end of the quarter, up from 286 funds in Q3.
As of February 24, 2025, Amazon.com, Inc. (NASDAQ:AMZN) traded at approximately $216.58 per share, reflecting market fluctuations. Despite a strong market capitalization of $2.23 trillion, the stock dipped nearly 3% to a low of $214.74, its lowest since early December. The decline followed Amazon’s Q4 2024 earnings report, which, despite exceeding expectations with earnings per share (EPS) of $1.86 and revenue of $187.8 billion (a 10% year-over-year increase), disappointed investors with a Q1 2025 sales forecast of $151 billion to $155.5 billion, below Wall Street’s $158.5 billion estimate. Additionally, concerns arose over Amazon.com, Inc. (NASDAQ:AMZN)’s aggressive $100 billion investment in AWS and AI, an increase from $83 billion in 2024, as well as a $2.1 billion foreign exchange headwind. Heightened competition from Microsoft and Alphabet further contributed to bearish sentiment, despite Amazon’s continued financial strength.
Amazon.com, Inc. (NASDAQ:AMZN)’s long-term growth remains remarkable, with its stock having surged over 226,744% since its 1997 IPO. In Q4 2024, the company’s operating income climbed to $21.2 billion from $13.2 billion the previous year, while net income doubled to $20 billion. AWS played a key role, reporting a 19% rise in quarterly revenue to $28.8 billion. For the full year, the company’s net sales increased 11% to $638 billion, with operating income nearly doubling to $68.6 billion and net income reaching $59.2 billion. Despite a 44% stock surge in 2024—outpacing the market’s 23% gain—early 2025 has seen increased volatility due to conservative forward guidance. However, Amazon’s financial resilience, dominance in e-commerce and cloud computing, and strategic investments in AI position it well for sustained long-term growth.
Mar Vista Investment Partners, LLC stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc.’s (NASDAQ:AMZN) profitability was the key highlight of the third quarter financial results, with AWS and International Retail achieving record operating margins, and North America Retail posting its second-best margin in five years. Even more impressive was the fourth quarter operating income forecast, projecting up to $20 billion, significantly exceeding the expected $16 billion and suggesting a record 11% margin. This exceptional performance was driven by economies of scale, logistics efficiencies, successful AI implementations, increasing ad revenue, and accelerated AWS growth.
We keep our investment in Amazon due to several factors: AWS growth has further potential, Amazon Prime Video monetization is in its initial stages, and the company is expanding into promising sectors like Pharmacy and Logistics. Furthermore, with strengthening profitability and cash reserves exceeding $100 billion, the possibility of substantial capital returns increases. By continuing to innovate and invest in technologies like AI and cloud computing, Amazon is well-positioned to keep its competitive edge.”
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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