We recently published a list of Top 10 Stocks to Buy According to Jericho Capital Asset Management. In this article, we are going to take a look at where Affirm Holdings, Inc. (NASDAQ:AFRM) stands against other top stocks to buy according to Jericho Capital Asset Management.
Jericho Capital Asset Management, founded in 2009 by Josh Resnick, is a New York-based hedge fund manager specializing in long/short equity strategies across developed and emerging markets. Resnick established the firm with a focus on identifying market inefficiencies and capitalizing on both undervalued and overvalued securities. The investment management firm specializes in the global technology, media, and telecommunications (TMT) sectors, offering a range of financial planning, advisory, and asset management services to institutional clients and high-net-worth individuals.
As an investment advisor, Jericho Capital provides discretionary investment advisory services to pooled investment vehicles, including hedge funds and private equity funds. These funds are typically structured as master-feeder funds, where feeder funds allocate their capital to a centralized master fund managed by the firm. This structure allows investors to access a diversified portfolio while benefiting from the firm’s expertise in security selection. Given the speculative nature of its strategies, the firm cautions investors about the substantial risks involved, including the potential for significant or complete loss of capital.
Jericho Capital employs a long/short investment strategy, aiming to generate returns by purchasing undervalued securities and short-selling overvalued ones. The firm may also pursue special opportunities strategies, which can involve distinct transaction costs and pricing structures. The success of these approaches relies heavily on the firm’s ability to accurately assess market opportunities, a process that is inherently complex and subject to fluctuations. Market volatility and economic disruptions can lead to unforeseen losses, requiring the firm to make strategic adjustments to protect investor capital.
Despite the risks, Jericho Capital’s approach appeals to investors seeking alternative investment strategies with the potential for high returns. By leveraging its expertise in equity markets, the firm positions itself as a key player in the hedge fund industry. While its investment styles involve substantial risks, its track record and disciplined investment framework make it a notable choice for those willing to embrace volatility in pursuit of long-term gains.
Currently the founder and managing partner of Jericho Capital, Josh Resnick played a key role at TCS Capital before launching Jericho Capital. TCS Capital was a prominent TMT-focused hedge fund that he joined shortly after its inception in 2001. Resnick’s extensive experience in finance and investment spans multiple industries, with a focus on identifying high-growth opportunities within rapidly evolving markets. Prior to his tenure at TCS Capital, Resnick served as a Managing Director at KPE Ventures, a New York-based venture capital firm dedicated to investments in media, entertainment, and technology. His expertise in business development was further honed during his time at Fox Entertainment Group in Los Angeles, where he was part of a strategic team overseeing expansion initiatives. He began his career in investment banking at Bear Stearns, working in the media and entertainment sector, where he gained critical experience in mergers, acquisitions, and corporate finance.
Resnick holds a Bachelor of Arts degree in Economics from Emory University, where he graduated Summa Cum Laude. His academic background provided a strong foundation for his career in investment management, equipping him with analytical skills essential for navigating complex financial markets. Beyond his professional achievements, Resnick is actively involved in philanthropy. He serves on the Board of Directors of the Child Mind Institute in New York City, a nonprofit organization dedicated to supporting children with mental health and learning disorders. His commitment to both finance and social impact underscores his well-rounded leadership in the investment world.
As of its latest filing for the fourth quarter of 2024, Jericho Capital Asset Management reported managing approximately $7 billion in 13F securities. The firm maintains a moderately concentrated portfolio, with its top ten holdings making up 64.13% of total assets. This level of concentration suggests a high-conviction investment strategy, where the firm places significant emphasis on a select group of stocks it believes have strong growth potential. The firm’s investment decisions reflect its focus on the global technology, media, and telecommunications sectors, indicating confidence in the long-term growth prospects of these industries. Overall, Jericho Capital’s portfolio structure highlights its strategic focus and deep industry expertise. Its investment approach aligns with a belief in innovation-driven sectors, making it a key player in the hedge fund landscape.
Our Methodology
The stocks discussed below were picked from Jericho Capital Asset Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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).
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Affirm Holdings, Inc. (NASDAQ:AFRM)
Number of Hedge Fund Holders as of Q4: 61
Jericho Capital Asset Management’s Equity Stake: $316.56 Million
Affirm Holdings, Inc. (NASDAQ:AFRM) is a leading American financial technology company specializing in “buy now, pay later” (BNPL) services for consumers and merchants. Founded in 2012 by PayPal co-founder Max Levchin, Affirm has grown into the largest BNPL lender in the United States. As of 2024, the company reports 19.5 million users and processes approximately $26.6 billion in annual payments. By offering interest-free and low-interest installment payment options, Affirm Holdings, Inc. (NASDAQ:AFRM) enables consumers to make purchases more affordably while helping merchants drive sales and customer engagement.
Affirm’s financial performance in its fiscal 2025 second quarter, ending December 31, 2024, exceeded market expectations. The company reported earnings of $0.23 per share, a striking 215% surprise compared to the projected loss of $0.20 per share. This represents a significant improvement from the previous year’s earnings of $0.04 per share. In the prior quarter, Affirm Holdings, Inc. (NASDAQ:AFRM) was expected to post a loss of $0.36 per share but instead reported a narrower loss of $0.31, beating estimates by 13.89%. These consistent earnings surprises highlight the company’s ability to outperform expectations, reflecting both operational efficiency and growing consumer adoption of its BNPL services.
Revenue growth has also been a key driver of Affirm’s strong performance. The company posted revenues of $866.38 million for the quarter, surpassing analyst projections by 7.74%. This marks a substantial increase from the $591.11 million in revenue recorded in the same period a year ago. Over the last four quarters, Affirm Holdings, Inc. (NASDAQ:AFRM) has consistently outperformed consensus revenue estimates, demonstrating robust demand for its payment solutions.
Affirm Holdings, Inc. (NASDAQ:AFRM) continues to strengthen its market position, capitalizing on the growing trend of flexible consumer financing. The combination of higher-than-expected earnings and revenue growth indicates effective cost management and sustained expansion. However, challenges remain, including regulatory scrutiny of BNPL services and broader economic factors affecting consumer spending.
Overall, AFRM ranks 8th on our list of top stocks to buy according to Jericho Capital Asset Management. While we acknowledge the potential for AFRM as an investment, our conviction lies in the belief that some 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 AFRM 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 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
