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DIY investors embrace Meta Platforms

With big new investments in data centers, servers, and network infrastructures, Meta Platforms' popularity with global DIY investors soared in the fourth quarter of 2021.

Data from global investment platform eToro shows that Meta rocketed from 13th place in Q3 to sixth in the last quarter of 2021.

This sentiment was also mirrored by Australian eToro investors, as Meta (formally known as Facebook) jumped from 11th place in Q3 to sixth in Q4 2021.

eToro's global markets strategist Ben Laidler said that the growing popularity of Meta Platforms with investors might be slightly surprising for some, considering it lagged the market in the fourth quarter.

However, there are several reasons why more DIY investors are holding the stock.

"Firstly, at 23 times 2022 consensus earnings, Meta Platforms is the cheapest of all the major US tech stocks, with a valuation nearly in-line with the overall S&P500, looking at price-to-earnings," Laidler said.

"Secondly, the firm has ditched the Facebook moniker and hitched its wagon to the fledgling metaverse sector, which is starting to cause real excitement among many investors. The metaverse is a huge growth opportunity and the fact Meta has thrown its brand and resources behind it will be a big catalyst for its development.

"And while it is not the only company exploring this area, it will no doubt be one of the major players," he said.

Growth companies remain highly popular with investors and dominate eToro's top 10 list of most-held stocks, despite fears over rising inflation and higher interest rates.

The Bank of England became the first major central bank last month to raise rates from record lows, while the US Federal Reserve has warned investors to expect up to three rate rises this year.

Despite that, electric vehicle company, Tesla, remained in pole position as the most held global stock on eToro's platform at the end of Q4, with Chinese rival, Nio, in second place.

In Australia, Tesla took the first place on the list and Nio remained in the third position.

"What's interesting from Australian investors is that they continue to approach investing with a long-term mindset," eToro's Australian market analyst Josh Gilbert said.

"Stocks such as Tesla and Nio are companies they believe will thrive over the next decade.

"Investors are not getting caught up in short term price movements, but instead looking ahead and focusing on future growth."

Read more: eToroBen LaidlerJosh Gilbert