Is Meta Platforms (META) the Best Growth Stock to Invest in Now?

December 19, 2024

Maleha Afzal

5 min read

We recently published a list of the 10 Best Growth Stocks To Invest In Now. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other best growth stocks.

Is a December rally in store for stocks in 2024? Some investors are expecting a surge in stocks from the 24th of December to the 3rd of January, 2025, also referred to as the Santa Claus Rally. On December 17, Ryan Detric, Chief Market Strategist at Carson Group, Joined Catalysts on Yahoo Finance to discuss whether he expects December to be a record-breaking month for the stock market.

Historically, the first half of December is usually slow for the stock market, while the second half is faster, suggested Detric. He also added that compared to election years in the past, this December has been very “flattish” so far. He also suggested that the Fed is going to continue the easing cycle and with the CPI declining, the current market conditions are favorable. Detrick then added that despite macroeconomic conditions and the performance of the Dow Jones index recently, he expects to see a record surge this month and expects “Santa Claus” to make an appearance this year.

Since the elections, stocks have been rallying with high hopes for the future. On December 18, Dan Ives, Managing Director at Wedbush Securities, joined Market Domination on Yahoo Finance to discuss his outlook on Big Tech and the new administration. Ives emphasized that the autonomous robotics and disruptive technologies sectors are going to benefit strongly from the new administration and its policies, despite concerns over tariffs. He also discussed the growing relationship between the new administration and Elon Musk, and how the two parties “need each other” to thrive, suggesting that Musk’s company has solid growth potential in the coming year and AI innovation will strengthen the collaboration immensely.

He also added that the environment is extremely bullish for Big Tech and expects growth in the coming year. Ives shared that while there are a few road bumps, especially from the Chinese market, the environment in retrospect is positive. Speaking of the electric vehicle market, he emphasized that new policies in the US coupled with international consolidation, especially in Europe and Asia, will benefit EV makers in the United States immensely.

The expectations from growth stocks are immense as the AI revolution takes precedence.

To come up with the 10 best growth stocks to invest in now, we went over multiple rankings on the internet to compile an initial list of growth stocks. We then examined the hedge fund sentiment of each stock and picked the most popular ones. Our list is in ascending order of the number of hedge fund holders as of Q3 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Is Meta Platforms (META) the Best Growth Stock To Invest In Now?

A biologist in a lab coat studying a culture of cells to find a cure for metabolic disorders.

Number of Hedge Fund Holders: 235

Meta Platforms, Inc. (NASDAQ:META) is the technology conglomerate behind Facebook, Instagram, Threads, and WhatsApp, with over 3 billion daily active users across all its platforms. META is leveraging artificial intelligence rapidly, especially for its overall social media experience. On November 20, the company introduced AI backgrounds and several other features for Messenger calling, also ensuring that its customers enjoy a more entertaining social media experience.

Some may argue that Meta Platforms, Inc. (NASDAQ:META) holds dominance in the social media sector, especially because it owns some crucial AI technologies. On October 29, JPM Securities managing director & equity research analyst, Andrew Boone, appeared in an interview on Yahoo Finance where he shared insights on META. Boone suggested that META has become a leader in AI implementation to enhance the overall social media user experience, highlighting it is currently the most mature, especially in terms of operational LLMs. Overall, Meta Platforms, Inc. (NASDAQ:META) has a solid business model with a prominent growth trajectory. The company is pioneering artificial intelligence and is expected to spend billions to support the goal.

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.

Overall, META ranks 3rd on our list of the best growth stocks to invest in. While we acknowledge the potential of META to grow, our conviction lies in the belief that certain 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.

Disclosure: None. This article is originally published at Insider Monkey.

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