7. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders as of Q4: 262
Citadel Investment Group’s Equity Stake: $692.57 Million
Meta Platforms, Inc. (NASDAQ:META) is rapidly increasing its presence in the digital advertising sector by leveraging AI-driven solutions, resulting in a 22% revenue surge in 2024, which is twice the industry’s growth rate. The integration of AI has significantly enhanced ad targeting, creativity, and efficiency, leading to a 32% improvement in advertiser return on investment (ROI) and a 17% decline in customer acquisition costs. Advertiser adoption of Meta’s AI-powered tools has quadrupled in just six months, contributing to a 14% increase in ad prices in Q4. As the company continues to develop innovations such as AI-driven video generation and with the digital advertising market projected to reach $513 billion by 2027, Meta Platforms, Inc. (NASDAQ:META) is well-positioned for sustained expansion.
The Menlo Park-based tech giant reported impressive Q4 2024 financial results, with revenue climbing 21% year-over-year to $48.4 billion, surpassing Wall Street’s estimate of $47 billion. Earnings per share (EPS) jumped 50% to $8.02, exceeding the anticipated $6.76, pushing Meta Platforms, Inc. (NASDAQ:META)’s stock up nearly 9%. The company’s digital advertising division remains its primary revenue driver, benefiting from advanced AI capabilities that improve content recommendations and ad targeting, further solidifying its competitive advantage in the market.
Meta Platforms, Inc. (NASDAQ:META) is preparing to launch a standalone Meta AI app in the second quarter of 2025, joining its existing platforms like Facebook, Instagram, and WhatsApp. This move aligns with CEO Mark Zuckerberg’s goal of making Meta the leader in artificial intelligence, competing with companies like OpenAI and Alphabet. Initially introduced in September 2023 as an AI-powered assistant, Meta AI has been integrated into the company’s apps, replacing search functions across its platforms and reaching 700 million active monthly users as of January 2025. While Meta AI is currently accessible through its website and existing apps, a dedicated app could enhance user engagement by offering deeper personalization and better organization of conversations.
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)
