We recently published a list of Jim Cramer’s Latest Portfolio: Top 10 Stocks to Watch. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other top stocks to watch from Jim Cramer’s latest portfolio.

Jim Cramer in a latest program on CNBC said that pain is “inevitable” in the stock market as investors go through the volatility infused by the latest tariffs announced by the US government against China, Canada and Mexico. However, Cramer said investors should get used to this volatility and be ready for different situations.

“Commerce Secretary Howard Lutnick said in the last of his myriad interviews of the day that maybe the Canadian and Mexican tariffs could be partially rolled back, perhaps as soon as tomorrow. Yes, it is all that capricious, and you better get used to it if you’re going to own stocks,” Cramer said.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In

For this article, we picked 10 stocks Cramer has been talking about recently. With each company we have mentioned the number of hedge fund investors. 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).

Meta Platforms, Inc. (NASDAQ:META)

Number Of Hedge Fund Investors: 262

Jim Cramer in a recent program said he sold some Meta Platforms, Inc. (NASDAQ:META) shares for this charitable trust amid the strong bull run. However, Cramer said the trust still owns the stock.

“It went up so much that we actually did a little bit of trim for the trust because it got so huge for us.”

Meta crushed expectations with the latest quarterly results, but yet again pointed to higher expenses in the future. In 2025, it sees total operating expenses in a range of $114-$119 billion, with 19-25% y/y growth. Capex is expected to rise 61-74% y/y to $60-$65 billion, compared to just $37.3 billion in FY24. Advertising rose strongly but analysts believe it should be seen in the context of higher political ad spend and holiday quarter perspective.  In 2025, the company might not be able to keep reporting double-digit growth in ad pricing amid weaker consumer spending and a cautious macroeconomic backdrop.

In the long term, Meta shares are expected to grow because of AI. How?

Meta Platforms (NASDAQ:META) is driving usage and ads revenue by improving its algorithms and user experience thanks to AI. Meta Platforms (NASDAQ:META)’s advancements in Reels and WhatsApp are helping manage CapEx growth as the company strives to stay competitive in AI. Meta Platforms (NASDAQ:META)’s substantial user base of 3.3 billion provides a data and distribution edge that could capture a significant share of the GenAI market.

Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter:

“Meta Platforms, Inc. (NASDAQ:META): Investment Initiated: April 2018: Internal Rate of Return (IRR*): 22% *IRR represents the annualized rate of return on an investment, accounting for the timing and magnitude of cash flows over the holding period.

For META, our 22% IRR aligns closely with the company’s compounded growth in earnings per share (EPS) and free cash flow per share during the 6 years holding period.

Looking ahead, Meta is expected to grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years. There’s a good possibility that it could exceed these estimates, considering the breadth of growth initiatives currently in place, such as advancements in Al, monetization of Reels, expansion into business messaging, and the ongoing development of the metaverse…” (Click here to read the full text)

Overall, META ranks 1st on our list of top stocks to watch from Jim Cramer’s latest portfolio. While we acknowledge the potential of META as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

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