Insider Monkey recently analyzed billionaire Steve Cohen’s latest portfolio to see some of his top AI stock picks.
Since Meta Platforms ranks 8th in our list of the 10 Best AI Stock Picks of Billionaire Steve Cohen, the stock deserves a detailed look.
Billionaire Steve Cohen is one of the few hedge fund managers who almost always dazzles with his outperformance and prescient bets. Cohen, who also owns The New York Mets, founded SAC Capital back in 1992, and since then through 2009 lost money only once. A Bloomberg report earlier this year said that Point72 Asset Management has been able to raise so much cash recently that it’s starting to decline external money. The fund has reportedly raised about about $12.8 billion since 2020.
Point72’s main fund returned about 11% in 2023, and 12% in the previous year.
Billionaire Steve Cohen’s Point72 Asset Management runs a highly diversified portfolio. As of the end of the March quarter, the portfolio’s net worth was over $41.2 billion, with tech stocks accounting for 17% of the total portfolio.
Unlike long-term value investors like Warren Buffett and Seth Klarman, Cohen moves with speed and adapts quickly. He’s been like this for decades. When he was in Wharton School of the University of Pennsylvania, he would often skip classes to watch stock movements at a local brokerage. He took pride in predicting stock movements based on their direction.
Cohen Wants Macro Teams at Point72
Cohen, worth over $19 billion, is yet again adapting to the quickly changing global financial landscape as investors demand steady returns. Earlier this year, it was reported that Cohen and his team is expanding macro teams at Point72 as the global economy resets to the new era of high interest rates. The report said that the fund would establish as many as 51 macro trading teams.
Meta Platforms Inc. (NASDAQ:META)
Steve Cohen‘s Q1’2024 Stake: $102,706,483
Billionaire Steve Cohen decreased his fund’s stake in Meta Platforms Inc. (NASDAQ:META) by 79% in the first quarter of 2024, ending the period with an $102.7 million stake in Meta Platforms Inc. (NASDAQ:META). Meta Platforms Inc. (NASDAQ:META) is deploying AI in its backend systems and algorithms to increase engagement and growth. We talked in detailed about how Meta Platforms Inc. (NASDAQ:META) is leveraging AI in our article titled Is Meta Platforms the Best AI Stock Pick of Billionaire Stanley Druckenmiller?
UBS recently published a report recommending some AI stocks to buy that would benefit from the estimate rise in spending on AI. UBS believes AI adoption is still in its early stage with just about 5% companies using generative AI. However, the firm expects AI monetization and usage to rise dramatically in the future. Meta Platforms Inc. (NASDAQ:META) is one of the stocks UBS recommended to investors to ride the AI boom.
Patient Capital Opportunity Equity Strategy stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its first quarter 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) was a top contributor in the first quarter gaining another 37.5%. Performance has been supported by strong top and bottom-line growth as the company maintains its leadership in the advertising space, despite Reels still being under monetized versus Newsfeed and Stories. The company continues to return cash to shareholders, increasing their buyback program by another $50B in February (6.4% of shares outstanding), and announcing their first dividend of $0.50 per share (0.39% yield). The company trades at 25x this year’s earnings, which we do not view as too demanding for a company with some of the best AI assets, an improving topline that should lead to free cash flow outperformance and continued capital return.”
Billionaire Cohen likes Meta Platforms but it’s not his top AI pick. META ranks 8th in the list of the 10 Best AI Stock Picks of Billionaire Steve Cohen.
Click to see the complete list of 10 Best AI Stock Picks of Billionaire Steve Cohen.
If you are looking for an AI stock that is as promising as Microsoft 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. Meta Platforms Inc. (META): The Best AI Stock To Buy According to Billionaire Steve Cohen? was originally published on Insider Monkey
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