The Motley Fool·2025-12-24 08:30Core Insights - Top hedge fund managers have significantly invested in Meta Platforms and Alphabet, with Meta's market value at $1.6 trillion and Alphabet's at $3.7 trillion, reflecting year-to-date stock increases of 13% and 64% respectively [1][2] Meta Platforms - Meta holds a strong position in digital advertising and smart glasses, being the second-largest ad tech company globally and leading in smart glasses shipments [4][6] - The company leverages artificial intelligence to enhance user engagement and ad conversion rates, with CEO Mark Zuckerberg highlighting improvements in content relevance through AI recommendation systems [5] - Analysts project Meta's earnings to grow at 17% annually over the next three years, with a median target price of $842 per share, indicating a potential 27% upside from its current price of $661 [8][9] Alphabet - Alphabet is the largest ad tech company, utilizing AI to enhance monetization of Google Search and YouTube, with significant increases in query volume and content optimization for influencers [9][10] - The company has developed the Gemini AI assistant, which has over 650 million monthly active users, positioning it as a strong competitor in the AI space [10] - Alphabet's Google Cloud is the third largest public cloud service, with a 34% increase in total cloud sales in the third quarter, driven by demand for AI chips and models, and projected revenue growth of 44% by 2026 [11][12] - Analysts expect Alphabet's earnings to grow at 15% annually over the next three years, with a median target price of $330 per share, suggesting a 6% upside from its current price of $310 [13][14]