We recently published a list of 10 Best American Stocks To Buy and Hold in 2025. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other best American stocks to buy and hold in 2025.

Will the Market Continue To Be Bullish in 2025?

Wall Street’s outlook for the stock market in 2025 reflects a cautious optimism following two consecutive years of substantial gains. Analysts predict continued growth, however at a more moderate pace compared to the explosive increases of 2023 and 2024. According to a report by CNN, published on January 1, strategists anticipate a 14.8% increase in the S&P 500 for 2025, which is significant but lower than the previous years’ performances. The Index saw gains of approximately 23% in 2024 and 24% in 2023. As per the report 2025 marks a return to typical growth rates after an extraordinary period of high returns, which has not been seen since the late 1990s.

While several factors are expected to contribute to the market growth, there are potential risks that can hinder it. One of the key factors contributing to growth is the anticipated business-friendly policies under President-elect Donald Trump. Dan Ives, who is a technology senior analyst at Wedbush Securities in his December 30 note mentioned his expectations that tech stocks can rise 25% in 2025 due to less regulation under the Trump administration. The analyst has picked Technology and Artificial Intelligence (AI) stocks as his best performers for the year.

On the other hand, there are potential risks that could negatively impact the stock market. For instance, the uncertainty surrounding Trump’s policy decisions may create a volatile environment for markets. Traders are particularly wary of how proposed tariffs could affect economic stability and investor confidence. David Sekera from Morningstar emphasizes that the implementation of tariffs is a significant wildcard that could sway market performance in either direction. We recently covered the analysis of Jurrien Timmer, Director of Global Macro at Fidelity Management & Research Company in our article titled, 12 High Growth International Stocks to Invest in Now. Here’s a piece from our coverage:

“While talking about large-cap stock performance, Timmer raises the question of whether this trend of narrow leadership will persist. He suggested that trends continue to move in the same direction until a significant change occurs. Given that large-cap growth stocks have dominated for years, it is reasonable to assume that they may continue to lead. However, he also cautioned the investors that as per the concept of mean reversion, asset prices will eventually return to their historical averages and when this happens, it could lead to sharp corrections in stock prices. Timmer believes that while 2024 was a “Goldilocks year,” for earnings and valuations, this year can be a tussle between higher earnings and rising long-term interest rates, thereby resulting in a volatile market.”

Our Methodology

To get the list of the 10 best American stocks to buy and hold in 2025, we used Insider Monkey’s third-quarter hedge funds database. Using the database we ranked the top 10 American stocks in ascending order of the number of hedge funds holding stakes in them.

Why do we care about what hedge funds do? 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).

Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 235

Meta Platforms, Inc. (NASDAQ:META) is an American technology company that is revolutionizing social media. The company owns and operates various popular social media platforms including Instagram, Facebook, and WhatsApp. It is also engaged in virtual reality technology and has launched its artificial intelligence model, which is integrated across all its social media platforms.

Recently, Meta Platforms, Inc. (NASDAQ:META) has announced to increase in its spending on AI. The news has been taken positively by the analysts as on January 23, Bank of America maintained its Buy rating on the stock, increasing its price target from $660 to $710. Analysts at the firm mentioned that they see potential in the artificial intelligence capabilities of Meta Platforms, Inc. (NASDAQ:META). The CEO has announced to increase in the AI investment from $40 billion spent in 2024 to $65 billion planned to be spent in 2025. In addition, the company also plans to launch and manufacture its GPUs to become a leading player in the industry.

Hardman Johnston Global Equity stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q3 2024 investor letter:

“During the quarter, we initiated one new position in Meta Platforms, Inc. (NASDAQ:META) and had no liquidations. Management at Meta has effectively addressed concerns about investment efficiency by shifting resources from Reality Labs towards broader AI initiatives with a clearer path to profitability. We believe management has successfully articulated the benefits of this strategy, highlighting how AI is driving user engagement and advertiser productivity. This, in turn, fuels continued revenue momentum and increases the likelihood of positive earnings surprises in the future. Additionally, the parent company of the social media platform, Facebook, has recently taken positive steps to enhance safety, which suggests to us a shift towards a more proactive and responsive approach to addressing important potential challenges and concerns. Weak oversight over data privacy protection was a key reason why we sold the position in the portfolio back in 2021. Removing this governance overhang allows us to feel comfortable to enter back into the stock at a time when we believe it is poised for strong earnings growth going forward.”

Overall, META ranks 3rd on our list of best American stocks to buy and hold in 2025. While we acknowledge the potential of META to grow, our conviction lies in the belief that 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.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

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