Meta Platforms (META) has emerged as a top pick among hedge funds, driven by robust fourth-quarter results, rising advertising revenue, and strategic investments in artificial intelligence. The stock's strong performance reflects renewed confidence in its long-term growth trajectory.
- Meta Platforms reported $34.8 billion in Q4 revenue, a 16% year-over-year increase.
- Operating income reached $14.2 billion, reflecting improved cost efficiency.
- Average revenue per user (ARPU) rose 22% to $13.40, driven by AI-enhanced ad targeting.
- Hedge funds increased net long positions in META by 18% over the past 60 days.
- Meta committed $10 billion to AI data center expansion in 2025.
- META has outperformed the S&P 500 by 12 percentage points YTD.
Meta Platforms (META) has gained significant traction among hedge fund managers, who have increased positions in the company over the past quarter. This shift follows the company's latest earnings report, which revealed a 16% year-over-year increase in quarterly revenue to $34.8 billion, surpassing analyst expectations. Operating income rose to $14.2 billion, reflecting improved cost discipline and efficient scaling of its ad technology infrastructure. The company’s AI-driven ad targeting and generative AI tools have contributed to a 22% growth in average revenue per user (ARPU), reaching $13.40. Meta’s investments in AI infrastructure, including a $10 billion commitment to data centers in 2025, are now yielding returns in ad efficiency and user engagement. These developments have strengthened investor confidence in the company’s ability to monetize emerging technologies. Hedge funds have collectively increased their net long positions in META by 18% in the last 60 days, according to recent filings. Notably, several large funds have added to their stakes, with one disclosing a 6.2% ownership stake—its largest in the tech sector. This trend suggests growing conviction in Meta’s ability to sustain profitability while advancing its AI roadmap. The momentum has also influenced broader market sentiment. META’s stock has outperformed the S&P 500 by over 12 percentage points year-to-date, and its weighted average analyst rating has improved to 'Buy' from 'Hold'. Investors are particularly focused on its potential to leverage AI across Instagram, Facebook, and the upcoming AI-powered Metaverse applications.