Here's Artisan Value Fund's Comment on Meta Platforms (META)

Artisan Partners, an investment management company, released its “Artisan Value Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets faced significant volatility in the second quarter, fueled by the announcement and subsequent pause of the "Liberation Day" tariffs. Against this backdrop, the fund’s Investor Class ARTLX, Advisor Class APDLX, and Institutional Class APHLX returned 5.99%, 5.96%, and 5.96%, respectively, in the second quarter compared to a 3.79% return for the Russell 1000® Value Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its second-quarter 2025 investor letter, Artisan Value Fund highlighted stocks such as Meta Platforms, Inc. (NASDAQ:META). Meta Platforms, Inc. (NASDAQ:META) is a technology company that develops products to connect people. The one-month return of Meta Platforms, Inc. (NASDAQ:META) was 4.61%, and its shares gained 40.57% of their value over the last 52 weeks. On August 20, 2025, Meta Platforms, Inc. (NASDAQ:META) stock closed at $747.72 per share, with a market capitalization of $1.878 trillion.

Artisan Value Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its second quarter 2025 investor letter:

In the communication services sector, our holdings in Walt Disney Co, Alphabet and Meta Platforms, Inc. (NASDAQ:META) made strong contributions. The latter two stocks were added to the Russell 1000® Value Index in the annual rebalancing that occurred in late June. The addition of Alphabet and Meta to the large-cap value index implies a shift in perceptions of these companies from growth to value. Of course, we’ve held Alphabet and Meta Platforms for several years as value investors. Importantly, we made our purchases at times when the stocks were very much out of favor. For example, we initially purchased Meta in Q2 2018 during a significant price decline caused by discouraging privacy-related revelations, specifically related to Cambridge Analytica and Europe’s new privacy policy. While Facebook, which was Meta’s name at the time, was historically a growth-oriented company, it had matured into a business that met our disciplined investment criteria. Facebook had become a dominant social media platform that monetized well, had a net cash balance sheet and was selling at significant discount to intrinsic value based on our analysis. Then in 2022, we significantly added to our position when Meta was again out of favor, this time due to its challenges from increased TikTok competition, Apple’s privacy changes and the company’s pivot toward the Metaverse reality project, which was met with skepticism from investors. Additionally, the higher interest rate environment pressured the shares of many tech-related stocks. By November 2022, Meta’s shares had fallen more than 70% and were selling at a meaningful discount to the S&P 500® Index, both on price to earnings and enterprise value to EBIT, presenting a favorable risk-reward profile, in our view. While the stock isn’t cheap today at a 27X P/E, this is on par with the P/E of the S&P500®Index, and Meta’s wide moat and secular growth drivers make it a much better business than the average S&P 500® Index company. Once our biggest portfolio position in the portfolio, Meta now sits in the bottom half of the portfolio as we are balancing its strong fundamentals with its fair valuation.

Meta Platforms, Inc. (NASDAQ:META) is in third position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 273 hedge fund portfolios held Meta Platforms, Inc. (NASDAQ:META) at the end of the first quarter, which was 262 in the previous quarter. In the second quarter of 2025, Meta Platforms, Inc. (NASDAQ:META) reported revenue of $47.5 billion, representing a 22% increase, both in reported and constant currency. While we acknowledge the potential of Meta Platforms, Inc. (NASDAQ:META) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Meta Platforms, Inc. (NASDAQ:META) and shared the list of stocks Jim Cramer recently discussed. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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