Why Meta Platforms, Inc. (META) is Among the Best Augmented Reality Stocks to Buy According to Hedge Funds

Hedge funds are doubling down on Meta Platforms, Inc. (NASDAQ:META), positioning it as a top play in the booming augmented reality (AR) sector. A surge in institutional stakes, coupled with breakthroughs in AR technology and supportive analyst sentiment, suggests investors are betting big on Meta’s ability to dominate the next wave of digital innovation.

Hedge Fund Activity: A Bullish Signal

Hedge funds have aggressively increased their stakes in Meta in early 2025, with 23.5 million shares added from December 2024 to March 2025—a 3,905% surge in holdings. Key players behind this move include:
- GuoLine Advisory Pte Ltd, which took a new position of 51,000 shares ($29.4 million).
- PROFICIO CAPITAL, which boosted its stake by 78,471% to 6.2 million shares ($3.7 billion).
- ASSENAGON ASSET MANAGEMENT, which increased its holdings by 712% to 2.2 million shares ($1.3 billion).

These moves reflect growing confidence in Meta’s strategic bets on AR and artificial intelligence (AI), with the stock now held by 262 hedge funds—the second-highest tally among all AR-focused companies.

The AR Play: Meta’s Technological Edge

Meta’s Reality Labs (RL) division is at the forefront of AR innovation, developing products like the Orion AR glasses, a sleek, glasses-like device that overlays holographic displays and contextual AI-driven interactions. This hardware is paired with advanced AI models, such as the Llama 4, which uses a "mixture-of-experts" architecture to optimize efficiency and reduce costs.

Analysts are taking notice. William Blair’s Ralph Schackart reaffirmed a Buy rating on Meta in April 2025, citing its AI-driven API ecosystem and standalone AR/VR app, which now boasts 700 million monthly active users. Meanwhile, Cantor Fitzgerald’s Deepak Mathivanan highlighted Meta’s $41.7 billion revenue guidance for Q1 2025 (+14% year-over-year), driven by AI-enhanced ad targeting and its dominance in global advertising.

Market Momentum and Analyst Sentiment

The AR market is primed for explosive growth. The global AR industry is projected to expand at a 42.36% compound annual growth rate (CAGR) from 2024 to 2029, reaching $248.38 billion by 2029. Meta’s 1.7 billion AR-enabled devices and its 3.3 billion monthly active users across social platforms give it a massive ecosystem to scale AR adoption.

Analyst consensus is overwhelmingly bullish:
- 23 "Buy" ratings vs. zero "Sell" ratings.
- Median price target: $700 (upside of 28% from April 2025 levels).
- Jefferies’ Brent Thill sees Meta’s standalone AI app and hardware-software synergy as catalysts for long-term value creation.

Risks and Considerations

Meta’s AR ambitions are not without hurdles. Reality Labs reported a $3 billion loss in 2024, and tariffs on Chinese-manufactured components could pressure margins. Additionally, some hedge funds prefer shorter-term AI stocks trading at 5x earnings or less. However, Meta’s scale, user base, and $62.3 billion net income in 2024 ($59B YoY growth) provide a sturdy foundation to weather near-term challenges.

Conclusion: A Long-Term Bet on AR’s Future

Meta Platforms is a standout AR investment in 2025, backed by 262 hedge funds, cutting-edge technology, and a $248 billion AR market primed for growth. While risks like regulatory headwinds and R&D costs persist, Meta’s 21% YoY revenue growth in its core ad business, 700 million AI assistant users, and $41.7 billion Q1 revenue guidance underscore its resilience.

With a median price target of $700 and analyst Buy ratings at 23/23, the stock appears undervalued relative to its 12% CAGR potential. For investors willing to look past short-term volatility, Meta’s leadership in AR hardware, AI integration, and ecosystem dominance positions it as a core holding for the next decade of tech innovation.

In a sector where 42.36% annual growth is the norm, Meta’s combination of institutional backing, technological prowess, and financial strength makes it a top pick for long-term AR investors.