Key Takeaways
- A fund with $2.59 billion in U.S. stocks added to its stakes in Meta Platforms (META), Alphabet (GOOGL) and NVIDIA (NVDA) in Q3, its 13F shows.
- All three stocks have fallen 9% to 18% since Sept. 30, while analysts’ average targets sit 40% to 63% above their last close.
- Meta’s and Alphabet’s capital spending now tops the cash their operations bring in.
- NVIDIA has the best case of the three, with rising targets and estimates and a forward P/E about half its long-run average.
Coronation Fund Managers, which holds $2.59 billion of US stocks, added to Meta Platforms, Alphabet and NVIDIA in the Q3. That’s what its 13F for the quarter ended Sept. 30, filed Oct. 27, shows.
All three have fallen at least 9% from their Sept. 30 prices.
But Wall Street still sees plenty of upside in all three, and one looks especially cheap.
Meta’s target hasn’t moved in a year
Meta is the biggest of the three bets. Coronation held 202,207 shares on Sept. 30, up 39% from the quarter before. They were worth $147 million, or 5.7% of its US stocks, which makes Meta its sixth-largest position. The stock has fallen 16% since.
The ad business is still growing fast: Q3 revenue rose 26% to $64.6 billion, and management guides Q4 to $73 billion to $76 billion.
But Q3 capex of $34.9 billion was more than the $32.8 billion of cash its operations brought in.
On Oct. 30, S&P Global Ratings cut its outlook on Meta to negative because it expects Meta to burn cash through 2028.
Analysts’ consensus target has barely changed over the past year. It’s $848 today, against $844 a year ago:
That’s 40% above the last close. At about 18x forward earnings, Meta trades below its 21.4x five-year average.
TIKR tracks 64 analysts on Meta Platforms. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Meta Platforms, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Meta Platforms’ Analyst Ratings
Analysts keep raising their sights on Alphabet
Alphabet is spending even more on capex. The fund held 221,740 shares on Sept. 30, up 53% from the quarter before. The holdings were worth $76 million, or 2.9% of its U.S. stocks (its No. 10). The stock is down 19% since, including a 12% drop on a search miss and $9 billion of cash burn after its Q3 report.
Its capital spending more than doubled to $51.4 billion in the quarter, and free cash flow turned negative.
One bright spot: Alphabet said sales of its own AI chips, which it used to keep for internal use, were a meaningful contributor to its growth.
Analysts’ consensus target has climbed from $311 to $403 over the past year, while the shares are about where they were a year ago:
That target is 44% above the last close, with the stock at about 20x forward earnings.
NVIDIA got the fund’s biggest boost
NVIDIA ties back to Meta, too: it’s putting $3 billion into Meta’s share sale. Coronation raised its NVIDIA share count 2,160%, to 268,556 shares on Sept. 30. They were worth $61 million, or 2.4% of its U.S. stocks (its No. 13). The stock is down 9% since.
Analysts have only grown more bullish. The consensus target has risen by half over the past year, from $219 to $329:
That’s 63% above the last close.
Consensus normalized EPS for fiscal 2028 (the year ending in January 2028) is $15.91, up 25% since the end of June.
Yet the stock trades at about 17x forward earnings, roughly half its 33x quarter-end average since 2014.
NVIDIA has the numbers on its side
All three stocks have dropped since Sept. 30, but analysts haven’t treated them the same way. Meta and Alphabet still have to show that their AI spending translates into future cash flow.
If I could only buy one right now, it’d be NVIDIA. Analysts keep raising its estimates and targets, and the stock costs about half what it usually does relative to earnings.
Of course, NVIDIA is using its own balance sheet to help customers buy its chips. Its receivables reached $63.1 billion on July 26, up from $38.5 billion in January.
We’ll find out on Nov. 17 whether those customers are paying faster. Coronation’s next 13F, due in mid-February, will tell us whether the fund added again.
So what is Meta stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
