5 Best Artificial Intelligence (AI) Stocks To Buy According to Financial Media

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

Number of Hedge Fund Holders: 242

There were 242 hedge funds long Meta Platforms, Inc. (NASDAQ:META) in the fourth quarter, with a total stake value of $44.2 billion.

Meta Platforms, Inc. (NASDAQ:META) is another big tech name on our list. It offers Llama, an open platform featuring AI models, tools, and resources, among more.

On February 9, Tigress Financial analysts maintained a Strong Buy rating and a $575 price target on Meta Platforms, Inc. (NASDAQ:META).

Artisan Partners said the following about Meta Platforms, Inc. (NASDAQ:META) in its fourth-quarter 2023 investor letter:

“Netflix and Meta Platforms, Inc. (NASDAQ:META)—both categorized in the communication services sector—rounded out our top five contributors in Q4 as well as for 2023. Both stocks suffered sharp declines in 2022, each losing more than 50% of their market capitalizations. In 2022, we purchased Netflix and added to our position in Meta on weakness as both stocks were selling significantly below our estimates of fair value. Meta’s challenges were more self-inflicted as a ramp-up in spending caused free cash flow to plummet. We saw Netflix’s slowing subscriber growth as a normal feature of a maturing streaming market.

With regard to Meta, the company’s “year of efficiency,” as 2023 was declared by Mark Zuckerberg, involved a recalibration of its spending plans to focus on profitability. While the stock also benefited from enthusiasm around artificial intelligence, the re-rating in the price multiple seems entirely rational as shares were selling for less than 10X next year’s estimated earnings at its 2022 lows for a business that still had strong growth drivers, consistent free cash flow generation and a large net cash position. While Meta is included in the Magnificent Seven mega-cap stocks, Meta is trading much cheaper (~25X P/E) than all the others aside from Alphabet (~24X P/E), which is the one other of the Magnificent Seven stocks we hold. While Meta’s stock is no longer extremely cheap, we feel it is still reasonably priced for a good business with attractive growth prospects. We did trim our positions in Meta and Netflix to put capital to work in names having greater discounts.”