Rowan Street Capital: Meta Platforms (META) Illustrates the Power of Compounding

Rowan Street Capital, an investment management company, released its Q4 2025 investor letter. A copy of the letter can be downloaded here. Rowan Street generated solid results in 2025 but underperformed the S&P 500 Index. The Composite returned +11.1% (net) in 2025 compared to +17.9% for the Index. Rowan Street delivered a cumulative net return of +252% over the past three years, compared to +78% for the Index during the same period. It is a concentrated strategy with a focus on long-term compounding. 2025 performance was driven by Tesla, its new position in the year. Rowan Street invests in the same set of companies, allowing time and compounding to build growth. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Rowan Street Capital highlighted stocks such as Meta Platforms, Inc. (NASDAQ:META). Meta Platforms, Inc. (NASDAQ:META) is a technology company that develops products to connect people. On February 9, 2026, Meta Platforms, Inc. (NASDAQ:META) stock closed at $677.22 per share. One-month return of Meta Platforms, Inc. (NASDAQ:META) was 7.31%, and its shares lost 5.92% of their value over the last 52 weeks. Meta Platforms, Inc. (NASDAQ:META) has a market capitalization of $1.713 trillion.

Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its fourth quarter 2025 investor letter:

"Meta Platforms, Inc. (NASDAQ:META) is our largest position. We first invested nearly eight years ago and have never sold a share. Over that period, the investment has compounded at approximately 19% annually.

Meta did not become a large position by design. It earned its weight over time as the business consistently grew revenues, earnings, and cash flow. As intrinsic value compounded, the stock price followed. As shown in the table below, the company’s fundamental growth broadly tracked the long-term return we achieved..." (Click here to read the full text)

Meta Platforms, Inc. (NASDAQ:META) is in the 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 third quarter, which was 260 in the previous quarter. 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 a list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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