Meta Platforms (META +2.85%) and Amazon (AMZN +1.99%) generated monster gains for patient investors during the last decade. Their share prices increased 760% and 810%, respectively. Both companies could be monster winners over the next decade as they shape the future of technology with innovations in artificial intelligence (AI), augmented reality, and robotics.
Not surprisingly, several hedge fund billionaires purchased stock in Meta Platforms and/or Amazon in the second quarter, as detailed below:
- Chris Rokos at Rokos Capital Management purchased 227,100 shares of Meta Platforms, increasing his position 90%. He also added 379,600 shares of Amazon, increasing his stake 23%. Both rank among his top five holdings, excluding options.
- Louis Bacon at Moore Capital Management purchased 57,200 shares of Meta Platforms, increasing his position 210%. He also added 444,100 shares of Amazon, increasing his stake 880%. Both rank among his top 15 holdings, excluding options.
- Karthik Sarma at SRS Investment Management purchased 71,300 shares of Meta Platforms, increasing his position 10%. It ranks as his third- largest holding.
- Steven Cohen at Point72 Asset Management purchased 1.6 million shares of Amazon, increasing his stake 52%. It ranks as his second largest holding, excluding options.
Here's what investors should know about these monster stocks.
Image source: Getty Images.
Meta Platforms: The market leader in smart glasses
Meta Platforms owns three of the four most popular social media networks, as measured by monthly active users. Those platforms and the consumer data they generate have helped Meta become one of the largest adtech companies in the world, second only to Alphabet's Google. But Meta has an adjacent opportunity in smart glasses.
CEO Mark Zuckerberg believes smart glasses will gradually replace smartphones as the personal computing form factor of choice over the next 15 years. That's a bold prediction, but the nascent smart-glasses market is growing quickly. Total shipments more than tripled last year and are forecast to grow faster than 60% annually through 2029, according to Counterpoint Research.
Meta currently dominates the market. Its Ray-Ban smart glasses accounted for over 60% of total shipments in 2024. Yet the company has only scratched the surface of what it hopes to accomplish. Last year, Zuckerberg announced Orion, smart glasses that blend artificial intelligence and augmented reality (AR). The product will not hit the market for several years but could be revolutionary.
Orion overlays the physical world with holographic screens, so someone wearing the glasses could browse the internet, stream media content, and communicate face to face with other people. Orion can also query the conversational assistant Meta AI, so the wearer could ask for information on anything they see in the real world. The glasses are controlled with eye movements, hand movements, and a wrist-worn neural interface.
Astronomical costs have so far prevented Meta Platforms from commercializing Orion, but the company is working to address those issues, and Zuckerberg hopes the glasses will hit the shelves within a few years. However, the stock is worth buying right now.
Wall Street expects earnings to increase at 17% annually during the next three years. That makes the current valuation of 27 times earnings look reasonable.
NASDAQ: META
Key Data Points
Amazon: The largest operator of industrial mobile robots
Amazon operates in several industries but has a particularly strong presence in three: e-commerce, digital advertising, and cloud computing. The company in one way or another is using artificial intelligence to unlock efficiencies in all three areas, but innovations in the retail segment are particularly promising because it's both the largest and least profitable part of the business.
Morgan Stanley analysts estimate shipping and fulfillment costs alone consume about 36% of retail revenue, but Amazon is building about a thousand generative AI applications to reduce those expenses, including tools to optimize seller listings, demand forecasting, inventory placement, and last-mile delivery routes.
Also, Amazon is the largest manufacturer and operator of industrial mobile robots -- more than 1 million robots roam its warehouses -- and a recently introduced AI model called DeepFleet is helping those autonomous machines navigate fulfillment centers more quickly. The company is also developing an AI framework that will let human workers engage robots with natural language.
Even more groundbreaking, The Information reported in June that Amazon was preparing to test humanoid robots for package delivery. Initially, the company hopes robots will ride with human drivers in Rivian electric vans and hop out to carry packages to doorsteps. But the company could eventually put robots in self-driving cars developed by its subsidiary Zoox.
Importantly, most innovations I've discussed will forever remain behind the scenes. Most consumers will never see the AI tools and robots that power Amazon warehouses. However, those technologies could make Amazon more profitable in the years ahead. That makes the stock a compelling long-term investment despite its somewhat expensive valuation of 35 times earnings.
