Alphyn Capital Management, an investment management firm, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The Master Account of the fund returned -2.7% net in the second quarter compared to 4.3% for the S&P500 Index. As of June 30, 2024, the top ten holdings accounted for approximately 66% of the portfolio, and approximately 16% of the portfolio was held in cash. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Alphyn Capital Management highlighted stocks like Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter. Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was 9.01%, and its shares gained 54.34% of their value over the last 52 weeks. On July 10, 2024, Alphabet Inc. (NASDAQ:GOOG) stock closed at $192.66 per share with a market capitalization of $2.371 trillion.
Alphyn Capital Management stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) continues to perform strongly, with 16% revenue growth, with particular strength in search (14%), YouTube ads (21%), and Cloud (28%) and near-record operating margins of 31.6%. Viewed just a few months ago as a vulnerable incumbent facing stiff competition from OpenAI and others, sentiment around Alphabet’s competitiveness in GenAI has turned more positive. Previously, some worried that Large Language Models (LLMs) could bypass traditional search results, potentially impacting ad revenue from third-party publishers. However, Alphabet has started incorporating “AI Overviews” in searches featuring responses from its LLM and Gemini. It reports improved user satisfaction and click-through rates exceeding those of traditional web listings. Alphabet believes AI will expand its search monetization and is exploring new features like short product videos, virtual try on options, and 3D product views within shopping ads. It has also rolled out AI tools for advertisers, such as enhanced image creation and improved measurement, to refine the advertising experience further. Alphabet benefits from a strong competitive moat due to its vast infrastructure, including data centers, custom chips, and leading LLMs like Gemini. This infrastructure allows them to seamlessly integrate AI across their products, reaching billions of users. However, their projected capital expenditure of $50 billion this year, primarily for tech infrastructure, is worth monitoring. While financially manageable, it signifies a shift from Alphabet’s capital-light past to a more capital-intensive approach in the AI era.”
A laptop and phone open to Google’s services in an everyday setting.
Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 165 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter which was 166 in the previous quarter. Alphabet Inc.’s (NASDAQ:GOOG) trailing 12-month revenue is $318.15 billion and its year over year quarterly growth rate is 15.40%. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We discussed Alphabet Inc. (NASDAQ:GOOG) in another article and shared the list of best AI stocks for the second half of 2024 and Alphabet Inc. (NASDAQ:GOOG) is in 3rd position on the list. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
