8. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders as of Q4: 262
Marshall Wace LLP’s Equity Stake: $769.69 Million
Meta Platforms, Inc. (NASDAQ:META) is an American technology conglomerate that owns and operates Facebook, Instagram, WhatsApp, and Threads. The company has strengthened its leadership in digital advertising through rapid advancements in AI, contributing to strong financial performance despite regulatory challenges. Meta’s Q4 2024 earnings report showed a 21% year-over-year revenue increase, reaching $48.4 billion and surpassing analyst projections of $47 billion. Earnings per share (EPS) surged by 50% to $8.02, significantly beating the expected $6.76. The success of AI-powered ad targeting and content recommendation systems has helped strengthen the company’s competitive edge, attracting higher ad spending and solidifying its market dominance.
Meta’s AI investments have driven increased user engagement, but investors were disappointed by its quarterly forecast: the company plans to allocate $60-65 billion toward infrastructure in 2025 to support AI development, despite emerging AI models like DeepSeek’s potentially lowering computing demands. However, competition is intensifying as advancements in cost-efficient AI models, such as Manus, challenge Meta Platforms, Inc. (NASDAQ:META) to refine its AI technologies like Llama. Additionally, macroeconomic factors, particularly President Trump’s trade policies, pose risks to Meta’s operations. Higher tariffs on Chinese imports and semiconductor chips could escalate infrastructure costs, while reduced consumer spending from these price increases may weaken Meta’s ad revenue.
Despite these challenges, investor confidence in Meta Platforms, Inc. (NASDAQ:META) remains high, with growing institutional and hedge fund support. The number of hedge funds with stakes in Meta increased to 262 by the end of Q4 2024, with holdings valued at nearly $59.4 billion, up from 235 funds in the previous quarter, according to Insider Monkey. The company’s strong financial performance, commitment to AI innovation, and continued dominance in digital advertising position it as a top investment choice for those looking to capitalize on the company’s ongoing technological advancements.
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)
