We recently compiled a list of the 10 Best Tech Stocks For Long Term Investment. In this article, we are going to take a look at where Meta Platforms Inc. (NASDAQ:META) stands against the other tech stocks.
In a recent conversation on December 3, Clare Pleydell-Bouverie from Liontrust Asset Management appeared on CNBC and shared insights on the current state of innovation, particularly in Silicon Valley. She emphasized that the pace of innovation is not only continuing but is accelerating. This rapid evolution necessitates frequent visits to the region to discern which companies are successfully navigating this transition and which are not. Pleydell-Bouverie noted that the clarity regarding these companies is improving quarter by quarter. She expressed a firm belief that the beneficiaries of the new technology cycle, which began about 18 months to 2 years ago with the advent of ChatGPT and the AI Revolution, will differ significantly from those in the previous technology cycle. While established names remain relevant, her focus is increasingly on opportunities beyond the MAG7.
The discussion also touched on market trends for 2025, highlighting a significant focus on AI infrastructure. Pleydell-Bouverie indicated that this year has seen a concentrated effort on building out the necessary compute infrastructure before monetization can occur. This infrastructure encompasses not only silicon but also semiconductor equipment and networking components, which are essential for scaling AI capabilities. She pointed out that while model providers are often viewed as commoditized, there is an ongoing arms race to develop large foundation models. Engineering tools that facilitate the integration of AI into businesses and various applications are also critical, although currently, most value resides within the AI infrastructure layer.
Looking ahead, Pleydell-Bouverie anticipates a shift in focus toward application layers where substantial disruption is expected. Numerous AI startups are targeting established players like Salesforce, indicating a competitive landscape. Despite this shift, she believes that the importance of NVIDIA in AI infrastructure remains strong. She described its role as pivotal, suggesting that it is positioning itself to become the operating system for an emerging landscape of AI-infused software set to launch in the coming year. Pleydell-Bouverie cautioned against viewing the company merely as a chip provider; instead, she argued that understanding its strategic positioning within this technological paradigm shift is crucial for investors.
Her insights reflect a broader narrative about Silicon Valley’s ongoing transformation and its implications for investors looking to navigate this rapidly evolving technological landscape effectively. As tech stocks become increasingly popular, we’re here with a list of the 10 best tech stocks for long-term investment.
Methodology
We first sifted through the stock screeners and internet lists to compile a list of the top mega-cap tech stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of developers working in unison to create the company’s messaging application.
Meta Platforms Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms Inc. (NASDAQ:META) is a technology company known for its popular social media platforms, including Facebook, Instagram, Threads, and WhatsApp. With over 3 billion daily active users across its services, it has established a vast user base. Recently, it leveraged its expertise in AI and AR to enhance its product offerings. In September, the company launched its AR glasses, Orion, alongside the release of its most affordable mixed-reality headset, Meta Quest 36.
Meta Platforms Inc. (NASDAQ:META), in November, also announced that it would make its open-source AI model, Llama, available to US government agencies dedicated to national security applications. This initiative aims to enhance the efficacy of government operations through advanced AI solutions. Llama has already been adopted by several major technology companies, positioning it as a breakthrough for the company and differentiating it in the competitive AI landscape.
The company is pioneering advertising technology using AI, which presents challenges for competitors attempting to replicate its success. As it continues to innovate and expand its technological capabilities, Meta Platforms Inc. (NASDAQ:META) is poised to maintain its leadership role.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q2 2024 investor letter:
“We are pleased to report that Meta Platforms, Inc. (NASDAQ:META), our largest position in the fund, has delivered a remarkable performance, +450% since our November 2022 note. Our investment in Meta dates back to 2018, with an average cost basis of approximately $172 per share. Today, the stock trades around $535, reflecting a 3x return over the six-year holding period, equating to a 20% annualized return.
We would like to remind you that achieving these types of returns is never a straight path. From time to time, we might experience volatility — that’s simply part of the investment journey. In fact, wealth creation and volatility go hand in hand. There’s no escaping it; it’s the “price of admission” the market demands. If you take a look at the chart below, you’ll notice the drawdowns META stock has faced over the years, with 2022 standing out as a particularly challenging period, where the stock saw a 75% drop….. ” (Click here to read the full text)
Overall META ranks 3rd on our list of the best tech stocks for long term investment. As we acknowledge the potential of META as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. 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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Disclosure: None. This article is originally published at Insider Monkey.