We recently published a list of Renaissance Technologies Portfolio: Top 10 Stock Picks. In this article, we are going to take a look at where Airbnb, Inc. (NASDAQ:ABNB) stands against other Renaissance Technologies portfolio’s top stock picks.
The American quant hedge fund Renaissance Technologies is known for using statistical and mathematical tools to drive its investment programs. It was founded in 1982 by Jim Simons, a mathematician who worked as a code breaker for the US National Security Agency during the Cold War. As of December 31, Renaissance Technologies had a portfolio valued at over $67.5 billion.
READ ALSO: Cathie Wood’s Stock Portfolio: 2025 Stock Picks and Jim Cramer’s February Portfolio: Top 10 Stocks.
Simons was among the pioneers of quantitative investing. He had an estimated net worth of $31.4 billion at the time of his death in May last year, making him the 51st richest person in the world at the time. His use of mathematical models and algorithms to drive long-term investment returns earned him a legacy that rivaled the likes of Warren Buffett and George Soros.
The Renaissance founder stepped down from active hedge fund management in 2010 and resigned as its executive chairman in 2021. The firm is now headed by Peter Brown, who has a strong educational background in mathematics and computer sciences. His father, Henry B.R. Brown invented the Reserve Primary Fund in 1970, the first money market fund to be established.
Brown is committed to using mathematical models to discover and unlock the value of stocks in the market. 2024 was a strong year for Renaissance Technologies. According to a report on Business Insider, the two funds that are open to investors—Renaissance Institutional Equities Fund (RIEF) and Renaissance Institutional Diversified Alpha (RIDA)—delivered double-digit returns of 22.7% and 15.6%, respectively.
Its signature Medallion fund performed even better, with a 30% gain, outperforming the broader market by nearly seven percentage points. Medallion was closed to outside investors in 1993 and has since then only been available to past and current employees, and their families. The fund generated average annual returns of 66% for three decades between 1988 and 2018, resulting in over $100 billion in profits during the period. This earned Medallion the reputation of being one of the most successful investment portfolios of all time.
On February 13, Renaissance Technologies filed a portfolio update, reflecting its holdings for the fourth quarter of 2024. The 13F SEC filings revealed significant changes in the portfolio, including a substantial reduction of stake in a leading technology conglomerate and increased investments in Asia-based artificial intelligence companies during the quarter.
Our Methodology:
We scanned Renaissance Technologies’ 13F portfolio, as of December 31, 2024. From there, we picked the top 10 stocks according to their stake value and ranked them in ascending order.
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 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A vacation home luxury bedroom setup with stunning decor showing a desired getaway experience.
Airbnb, Inc. (NASDAQ:ABNB)
Stake Value as of Q4 2024: $548,683,144
Airbnb, Inc. (NASDAQ:ABNB) is an American company that operates an online marketplace to connect people looking to rent out their properties with people who are looking for accommodation for their short-term homestays across various regions of the world. It is headquartered in San Francisco, California.
Airbnb, Inc. (NASDAQ:ABNB) reported fourth-quarter results on February 13 that beat analysts’ estimates. Revenue increased 12% year-over-year to $2.5 billion, driven by robust growth in nights stayed and a modest uptick in average daily rates. Net income for the quarter was posted at $461 million, improving from a net loss of $349 million in Q4 2023.
Airbnb, Inc. (NASDAQ:ABNB) said that it had rebuilt its platform over the past several years and rolled out new product updates to enhance user experience, which is helping drive higher conversion rates. The management also hinted at the new offerings planned for launch in May this year.
The company generated $4.5 billion in free cash flow in fiscal 2024, representing a free cash flow margin of 40%. It ended the year with $10.6 billion of corporate cash and investments. The strong balance sheet position allowed Airbnb, Inc. (NASDAQ:ABNB) to repurchase $3.4 billion of Class A common stock for the full year. The vacation rental company has been encouraged by early demand in 2025 and expects to deliver revenue between $2.23 billion and $2.27 billion in Q1, representing 4% to 6% year-over-year growth.
As of the close of business on February 19, ABNB’s share price had surged by over 12% since the earnings report. Investor sentiment remains stable. According to Insider Monkey’s database for Q4 2024, 54 hedge funds held a stake in the company, unchanged from the third quarter. As of December 31, 2024, Renaissance Technologies had investments of nearly $549 million in Airbnb, Inc. (NASDAQ:ABNB).
Overall, ABNB ranks 8th on our list of Renaissance Technologies portfolio’s top stock picks. While we acknowledge the potential of software companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ABNB 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
