Wells Fargo’s Best Growth Stocks: 28 Stocks With The Highest Consensus EPS Growth Estimates

11. Meta Platforms, Inc. (NASDAQ:META)

Consensus Long-Term EPS Growth Estimate: 20%

Number of Hedge Fund Holders: 219

Meta Platforms, Inc. (NASDAQ:META) is the leading social media company in the world. The firm operates through Facebook, Instagram, and WhatsApp, and courtesy of Facebook, it can boast about having 3.2 billion users under its wing. These users also form the backbone of Meta Platforms, Inc. (NASDAQ:META)’s hypothesis as they allow the firm to have bargaining power with advertisers. Advertisement revenue is key for the firm as it accounted for 96% of its revenue during H1 2024. As a result, Meta Platforms, Inc. (NASDAQ:META)  depends on broader economic health for its revenue as advertisers spend more in a robust economy. Its dominance in the social media industry has allowed the firm to establish a fortress balance sheet as is evident from $43.9 billion in cash. These resources, in turn, have enabled Meta Platforms, Inc. (NASDAQ:META) to gain a strong foothold in the AI industry courtesy of its investment in training infrastructure and the Llama foundational AI model. As a result, the firm’s hypothesis also depends on its ability to generate profit from its AI investments. On this front, Meta Platforms, Inc. (NASDAQ:META) offers AI marketing services to advertisers to streamline their operations.

Polen Capital mentioned Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter. Here is what the fund said:

“Meta Platforms delivered robust results in the period, with revenue growth accelerating in the first quarter. However, revenue comparisons for Meta will become more difficult from here, and its guidance for 2Q revenue fell below market expectations. After the company’s “year of efficiency,” where it cut costs in its core business, management is now indicating another ramp-up in GenAI and metaverse spending, spurring concerns about future profit margins. Metaverse spending, by our calculations, is now over $20 billion per year with little to no expected return on the foreseeable horizon.”