In this article, we will discuss the Top 10 Stocks to Buy According to Lakehouse Capital.
Founded in 2016, Lakehouse Capital is a boutique investment management firm that is based in Sydney, Australia. It is a growth equity manager that provides 2 funds, the Lakehouse Small Companies Fund and the Lakehouse Global Growth Fund. The investment firm takes a long-term, high-conviction approach with a core focus on seeking asymmetric outcomes. Furthermore, it opines that highly successful investments tend to share some common attributes.
Investment Approach of Lakehouse Capital
Donny Buchanan, CFA, featured on The Australian Investors Podcast, wherein he highlighted that only a small majority of companies tend to create the majority of returns in the indexes. While the S&P 500 Index managed to deliver good returns last year, 72% of the companies in the index underperformed the index return, added Buchanan. Notably, between January 5, 2024 – December 27, 2024, the S&P 500 delivered a return of ~27.1%. Lakehouse Capital tends to seek asymmetric opportunities with numerous ways to win and only a few ways to lose. The company is focused on compounding its investors’ wealth over the long term.
Amidst these views, let us now have a look at the Top 10 Stocks to Buy According to Lakehouse Capital.
A close up of a portfolio of a variety of investment grade corporate bonds.
Our Methodology
To list the Top 10 Stocks to Buy According to Lakehouse Capital, we selected the top 10 stocks in Lakehouse Capital’s portfolio as of its Q1 2025 13F filing. We settled on the hedge fund’s 10 biggest holdings. Finally, we ranked the stocks in ascending order based on the value of Lakehouse Capital’s equity stakes. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q1 2025.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Meta Platforms, Inc. (NASDAQ:META)
Lakehouse Capital’s Equity Stake: $7.12 Million
Number of Hedge Fund Holders: 273
Meta Platforms, Inc. (NASDAQ:META) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. On July 3, Needham upgraded the company’s stock to “Hold” from “Underperform” with no price target, as reported by The Fly. The firm had maintained its cautious stance, highlighting strategic concerns and structural cost pressures. The channel checks have been driving the upside to the estimates, while the firm also highlighted Meta Platforms, Inc. (NASDAQ:META)’s strong labor productivity metrics. Furthermore, it noted the company’s globally scaled, software-only model, benefiting from closed-loop attribution for advertisers.
Despite the upgrade, Needham warned that the company’s strategy diffusion wastes capital and adds risks. There are concerns related to the persistent margin and FCF pressures, with Meta Platforms, Inc. (NASDAQ:META)’s stock-based compensation per full-time employee (SBC/FTE) being the highest among peers. The company’s headcount was 76,834 as of March 31, 2025, reflecting a rise of 11% YoY. For Q1 2025, the company stated that Ad impressions delivered throughout the Family of Apps rose 5% YoY, while average price per ad increased 10% YoY.
Macquarie Asset Management, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“The largest individual detractors from performance relative to the benchmark were not owning Meta Platforms, Inc. (NASDAQ:META), not owning Eli Lilly & Co., and our position in Electronic Arts Inc. Meta stock was slightly negative to end the quarter but relative to the benchmark and other communication services stock performed well. Having a zero weight relative to the large benchmark allocation hurt. We continue to follow this company closely and while we have become incrementally more constructive, we still have lingering concerns about the business model and worry the cyclical weakness in advertising spend could create further pressure.”
9. ServiceNow, Inc. (NYSE:NOW)
Lakehouse Capital’s Equity Stake: $8.73 Million
Number of Hedge Fund Holders: 106
ServiceNow, Inc. (NYSE:NOW) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. Moody’s Ratings upgraded the company’s long-term issuer rating and senior unsecured notes rating to A2 from A3, while maintaining a positive ratings outlook. The upgrade and the positive outlook come off the back of ServiceNow, Inc. (NYSE:NOW)’s strong growth fueled by product innovation and increasing profitability, which can continue to strengthen its financial profile.
ServiceNow, Inc. (NYSE:NOW) possesses a strong track record of expanding addressable markets through extending success in the service desk into broader IT workflows and non-IT business workflows, added Raj Joshi (Moody’s Ratings Senior Vice President). The firm expects ServiceNow, Inc. (NYSE:NOW)’s revenues to increase by ~20% to $13 billion in 2025. Furthermore, despite the large scale, the firm sees similar growth rates over the upcoming 2 – 3 years. It also expects its FCF to surpass $4 billion and $5 billion in 2025 and 2026, respectively.
Parnassus Investments, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“We initiated two positions in the Information Technology sector during the quarter: Advanced Micro Devices, a manufacturer of semiconductor devices and electronic components, and ServiceNow, Inc. (NYSE:NOW), which provides software for automating enterprise workflows, after significant share price drawdowns in both cases. As a result of these additions, our underweight in the sector lessened, and our positioning is closer to market weight.
ServiceNow’s product innovation and its ability to streamline and automate complex workflow across functions enable the company to sustain sales growth. Its wide moat, characterized by high switching costs and deep integration into critical enterprise functions, further cements the company’s long-term competitiveness. Market selloffs provided an opportunity to access one of the highest-quality software companies that is reshaping enterprise operations worldwide.”
8. Pinterest, Inc. (NYSE:PINS)
Lakehouse Capital’s Equity Stake: $10.85 Million
Number of Hedge Fund Holders: 86
Pinterest, Inc. (NYSE:PINS) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. Analyst Ken Gawrelski of Wells Fargo maintained a “Buy” rating on the company’s stock with a price objective of $42.00. The analyst’s rating is supported by the combination of factors, which include an optimistic outlook for its financial performance. As per the analyst, Pinterest, Inc. (NYSE:PINS) can see a modest rise in revenue and EBITDA for Q2 2025, thanks to the robust user engagement and advertising momentum, primarily in the UCAN region.
Furthermore, the stabilization of the tariff environment can also contribute positively to revenue growth in Q3 2025. Pinterest, Inc. (NYSE:PINS)’s capability to enhance margins and manage costs effectively was also highlighted. Also, the return of cross-border e-commerce advertisers as well as growth in monthly active users continue to strengthen the favourable outlook. Pinterest, Inc. (NYSE:PINS)’s AI advancements continue to help users take action and make more intentional shopping decisions. For Q2 2025, the company expects revenue of between $960 million – $980 million, demonstrating 12% – 15% growth YoY. Also, it anticipates Q2 2025 adjusted EBITDA of between $217 million – $237 million.
Renaissance Investment Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“We made several changes to the portfolio in the fourth quarter. Most recently, we added a new position in the Communication Services sector in December with Pinterest, Inc. (NYSE:PINS), a leading visual search and discovery platform with a unique curation function that enables users to find and display new ideas and creations that focus on interests such as fashion and home décor among other consumer goods. Since 2022, a new management team has transformed Pinterest into a shopping platform, providing more value and capabilities to advertisers including direct connection with users, resulting in higher profits. In addition, the company was an early adopter of AI to increase personalization, advertising relevance options, and automated processes to increase ease-of-use for smaller advertisers. In the near term, we expect Pinterest to see monetization improvements with upside to Average Revenue Per User (ARPU) and traction in new categories and international markets.”
7. The Charles Schwab Corporation (NYSE:SCHW)
Lakehouse Capital’s Equity Stake: $12.2 Million
Number of Hedge Fund Holders: 102
The Charles Schwab Corporation (NYSE:SCHW) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. The company received the results of the Federal Reserve’s 2025 Comprehensive Capital Analysis and Review (CCAR). On the basis of these results, the company’s calculated stress capital buffer (SCB) remains well below the 2.5% minimum, leading to the SCB at that floor. The 2.5% SCB will be applicable to Schwab for a four-quarter period beginning October 1, 2025.
The Charles Schwab Corporation (NYSE:SCHW)’s Common Equity Tier 1 (CET1) ratio of 32% as of March 31, 2025 remained well in excess of the regulatory minimum of 4.5% combined with the SCB of 2.5% because of the relatively low risk nature of the company’s balance sheet assets. The Charles Schwab Corporation (NYSE:SCHW)’s robust organic growth, mainly in Net New Assets, along with effective capital management, can benefit the shareholders. The core net new assets brought by new and existing clients saw an increase of 13% YoY in May 2025 to reach $35.0 billion.
In Q1 2025, the company saw daily average trading volume grow by 17% quarter-over-quarter because of the sharp increase in market volatility. Baron Funds, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Strength in Financials came from specialty insurer Arch Capital Group Ltd. and brokerage firm The Charles Schwab Corporation (NYSE:SCHW). Schwab’s shares outperformed for a second consecutive quarter, helped by an improved earnings outlook. After reaching trough levels last year, Schwab’s cash balances continued to trend higher during the quarter. Investors believe Schwab will use these balances to pay down higher cost borrowings, which should drive net interest income and earnings higher.”
6. Wix.com Ltd. (NASDAQ:WIX)
Lakehouse Capital’s Equity Stake: $12.3 Million
Number of Hedge Fund Holders: 50
Wix.com Ltd. (NASDAQ:WIX) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. Oppenheimer reiterated an “Outperform” rating and a price objective of $220.00 on the company’s stock after the company announced a strategic partnership with Alibaba. This partnership is expected to offer Wix merchants access to Alibaba’s wholesale platform. It will also enable Alibaba sellers to build storefronts that are powered by Wix technology.
As per the firm, this arrangement is expected to be beneficial for Wix.com Ltd. (NASDAQ:WIX)’s premium subscriber counts and bookings growth, even though specific details related to co-selling strategies, prioritization, and financial terms are not yet disclosed. Even though Wix.com Ltd. (NASDAQ:WIX) has pivoted away from using multi-year bookings as the foundation of its Collection disclosures, there are expectations that the Alibaba partnership can be a significant factor in the company’s growth trajectory. The partnership is expected to take a phased rollout approach, with potential activation projected for H2 of the year, which could aid management’s expected acceleration in the latter part of the year.
As per Wix.com Ltd. (NASDAQ:WIX), the expected future features consist of AI-powered product discovery, automated onboarding processes, and intelligent product-matching tools. Notably, these innovations focus on simplifying and accelerating global commerce, mainly benefiting small and medium-sized enterprises. Munro Partners, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:
“Within the Digital Enterprise Area of Interest (AoI), both Wix and GoDaddy reported strong results for the quarter, with revenue, profit and free cash flows exceeding investors’ expectations. Both web builders’ management teams expressed confidence in their respective continued growth fuelled by new product features powered by AI innovations.”
5. Visa Inc. (NYSE:V)
Lakehouse Capital’s Equity Stake: $12.7 Million
Number of Hedge Fund Holders: 165
Visa Inc. (NYSE:V) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. VGS has announced an expansion of its successful, long-term partnership with Visa Inc. (NYSE:V). Further strengthening the years of product partnership and shared achievements, VGS will be the preferred pilot partner with Visa via the Visa Intelligent Commerce program, supporting to pioneer future of AI commerce. Notably, VGS powers 4.5 billion tokens globally, several of which are Visa cards, for some of the largest platforms, merchants, FIs, and Fintechs.
This strategic partnership for payments tokenization has been evolving into a foundational infrastructure to allow for AI and Agent-driven commerce experiences. This emerging ecosystem is often known as Agentic Commerce. Visa Inc. (NYSE:V)’s healthy 9% Q2 2025 net revenue growth was supported by strong trends in payments volume, cross-border volume, and processed transactions. Notably, the consumer spending was resilient, despite the macroeconomic uncertainty. For Q3 2025, Visa Inc. (NYSE:V) is expected to see low double-digit YoY growth in net revenue, while EPS growth is anticipated to be in the high teens.
Parnassus Investments, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Visa Inc. (NYSE:V) reported quarterly earnings that topped consensus expectations and issued optimistic guidance at its latest Investor Day. In a market environment where investors turned to more defensive options, Visa benefited from being relatively resilient for a payments stock, given its domestic debit card exposure, which is primarily grocery related.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Lakehouse Capital’s Equity Stake: $13.2 Million
Number of Hedge Fund Holders: 227
Alphabet Inc. (NASDAQ:GOOGL) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. The company’s investments in AI technologies position it well to capitalize on the upcoming wave of broad-based digital innovation. The integration of AI into the company’s core products, like search and advertising platforms, can help enhance user experiences and fuel engagement. This can result in increased ad effectiveness and revenue growth. In Q1 2025, Alphabet Inc. (NASDAQ:GOOGL) rolled out Gemini 2.5, which it believes is the most intelligent AI mode. It continues to achieve breakthroughs in performance and happens to be an extraordinary foundation for future innovation.
Furthermore, in Q1 2025, Search saw strong growth, thanks to the engagement it is witnessing with features such as AI Overviews, which now has 1.5 billion users per month. Amidst increased competition, Alphabet Inc. (NASDAQ:GOOGL) continues to maintain numerous key advantages in the broader digital advertising space. Alphabet Inc. (NASDAQ:GOOGL)’s vast user data offers unparalleled targeting capabilities for advertisers. Its integration of AI into the advertising suite can help improve ad performance and ROI for marketers.
Qualivian Investment Partners, an investment partnership focused on long-only public equities, released its Q1 2025 investor letter. Here is what the fund said:
“Alphabet Inc. (NASDAQ:GOOGL) declined in the quarter due to (1) uncertainty regarding the returns on the large amount of capital expenditure being spent on generative AI investments and whether they will yield proper returns and (2) whether competing generative AI chatbots (Chat GPT, Perplexity, others) will take share away from GOOGL’s core search business.
GOOGL has been under a lot of pressure in recent months to prove it can be a winner in the AI search race. The company responded by introducing AI Overviews (AI-generated answers to search queries that appear at the top of the page). Reception to the AI Overviews has been encouraging, with consumers searching more frequently and clicking through at higher rates. GOOGL has also introduced ads on AI Overviews which are monetizing at similar rates as regular search ads.
In May , the company announced that it is integrating AI into its search engine through AI Mode. Users can make more complicated requests in a conversational chatbot interface, performing multi-step tasks like finding tickets or making reservations…” (Click here to read the full text)
3. Sea Limited (NYSE:SE)
Lakehouse Capital’s Equity Stake: $14.6 Million
Number of Hedge Fund Holders: 84
Sea Limited (NYSE:SE) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. The company’s capability to improve net take rates, mainly in the e-commerce segment, can fuel the profitability. With Shopee continuing to enhance the value proposition for merchants with the help of improved logistics, marketing tools, and customer reach, it can justify increased take rates without giving up the market share. Sea Limited (NYSE:SE) released its Q1 2025 results, wherein on the e-commerce front, Shopee delivered a record-high GMV and gross order volume. Shopee happens to be the leading e-commerce platform in Southeast Asia and Taiwan.
Sea Limited (NYSE:SE)’s robust execution of operational priorities, such as enhancing price competitiveness, improving service quality, and strengthening of content ecosystem, made Shopee competitive and differentiated. In e-commerce, gross orders totaled 3.1 billion for the quarter, reflecting 20.5% YoY growth, with GMV coming at US$28.6 billion in Q1 2025, increasing 21.5% YoY. As Shopee’s ecosystem matures, the platform could generate additional high-margin revenue streams, including advertising and value-added services for merchants. As a result, these offerings can help improve overall profitability without necessarily raising the take rates on transactions.
Lakehouse Capital, a Sydney-based investment manager, released its May 2025 investor letter. Here is what the fund said:
“Sea Limited (NYSE:SE) delivered another impressive result, with sustained momentum driving solid top-line growth and continued progress on profitability. Group revenue grew 30% to US$4.8 billion, driven by strong performance from the company’s e-commerce platform, Shopee, and its fintech business, Monee. Shopee further extended its market leadership across Asia and Brazil, with record GMV rising 22% to US$28.6 billion and continued improvement in its take rate, up 60 basis points to 12.3%. Monee accelerated its growth with their loan book rising 77% to US$5.8 billion, driven by a >50% increase in active borrowers to over 28 million whilst maintaining sound credit quality. Combined with strong operating leverage across all business units, this growth helped lift adjusted EBITDA 136% to US$947 million and continues to demonstrate Sea’s ability to deliver further profitable growth.”
2. Amazon.com, Inc. (NASDAQ:AMZN)
Lakehouse Capital’s Equity Stake: $21.1 Million
Number of Hedge Fund Holders: 328
Amazon.com, Inc. (NASDAQ:AMZN) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. Morningstar opines that, over the long term, it anticipates e-commerce to continue to take share from brick-and-mortar retailers. Furthermore, the firm believes Amazon.com, Inc. (NASDAQ:AMZN) to gain share online. As per the firm, Amazon.com, Inc. (NASDAQ:AMZN)’s retail business enjoys a wide moat, which stems from network effects related to its marketplace, a cost advantage associated with the purchasing power, logistics, vertical integration, a negative cash conversion cycle, and intangible assets related to technology and branding.
The traditional retailers have significantly invested in technology to keep pace. Considering Amazon.com, Inc. (NASDAQ:AMZN)’s technological prowess, huge scale, and relationship with consumers, Morningstar believes that the company widened its lead, which can result in economic returns well in excess of its cost of capital. Morningstar also opines that AWS has a wide moat, stemming from increased customer switching costs, cost advantage related to the economies of scale, intangible assets coming from semiconductor and facility development. Notably, Amazon Prime memberships tend to attract and retain customers who spend more with Amazon.com, Inc. (NASDAQ:AMZN). This helps create a powerful network effect while, at the same time, bringing recurring and high-margin revenue.
Lakehouse Capital, a Sydney-based investment manager, released its May 2025 investor letter. Here is what the fund said:
“Amazon.com, Inc. (NASDAQ:AMZN) reported a solid quarterly result with net sales up 9% year-on-year (10% in constant currency terms) to $155.7 billion and operating profit up 20% to $18.4 billion. The company’s core e-commerce business remained resilient in the face of potential tariffs, with management noting they hadn’t seen any material change in consumer buying behaviour as at the end of April. Amazon web services (AWS) grew 17% to $29.3 billion which was a slight deceleration from the 19% delivered last quarter. Whilst this seems disappointing at first blush, management reiterated that demand is very strong they are still capacity constrained. Artificial intelligence (AI) continues to be a key growth driver with AI workloads growing in excess of 100% year-on-year on AWS. Overall, it was a positive result, and we remain confident that the company is set to deliver many years of solid revenue growth and margin expansion.”
1. MercadoLibre, Inc. (NASDAQ:MELI)
Lakehouse Capital’s Equity Stake: $23.03 Million
Number of Hedge Fund Holders: 108
MercadoLibre, Inc. (NASDAQ:MELI) is one of the Top 10 Stocks to Buy According to Lakehouse Capital. In the broader fintech sector, the company’s Mercado Pago has emerged as a critical driver of growth. Its credit business has demonstrated strong expansion, primarily in Argentina and Brazil. MercadoLibre, Inc. (NASDAQ:MELI) saw net revenue from Mercado Pago in Q1 2025 grow by 43% in dollars YoY, touching $2.6 billion. The company’s rich transaction data, along with an established user base, offers a strong competitive advantage in providing tailored financial services.
With financial inclusion increasing throughout Latin America, MercadoLibre, Inc. (NASDAQ:MELI) can expand credit, payment, and investment products to an ever-evolving market of underserved consumers and businesses. Furthermore, the integration of fintech services with e-commerce platform helps create synergy, which can fuel user engagement and revenue growth throughout both segments. Providing the users a yield on deposits that broadly matches or exceeds benchmark rates with immediate liquidity remains critical. MercadoLibre, Inc. (NASDAQ:MELI)’s low cost-to-serve allows it to provide such yields at scale, while growing profitably.
MercadoLibre, Inc. (NASDAQ:MELI) demonstrated optimism in the performance of its credit portfolio, which saw a growth of 75% YoY to $7.8 billion in Q1 2025. The company sustained high growth rates and maintained delinquency at comfortable levels. Sands Capital, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“MercadoLibre, Inc. (NASDAQ:MELI) is the largest ecommerce and fintech ecosystem in Latin America by market share. The business delivered a strong fourth quarter in 2024, with operating income exceeding consensus estimates by 37 percent. This marked a significant rebound from 2024’s third quarter, when operating income fell short of expectations. The outperformance was largely driven by operations in Argentina, where 31 percent year-over-year revenue growth boosted earnings due to the region’s higher contribution margin relative to Brazil and Mexico. As of year-end, MercadoLibre served 100 million annual unique ecommerce customers and more than 60 million monthly active financial technology users.”
While we acknowledge the potential of MELI to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MELI and that has 100x upside potential, check out our report about this cheapest AI stock.
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