Baron Funds, an investment management company, released its “Baron Opportunity Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund rose 4.35% (Institutional Shares), lagged the Russell 3000 Growth Index, which gained 7.80%, and essentially matched the S&P 500 Index, which advanced 4.28%. In the first half of 2024, the fund posted solid gains, rising 20.44% compared to a 19.90% return for the Russell 3000 Growth Index and beating the S&P 500 Index’s 15.29% gain. After a slow start to the quarter, U.S. stocks increased steadily in May and June. Increased worries about inflation, the pace of expected rate cuts by the Federal Reserve, and growing geopolitical tensions in the Middle East were blamed for the early market weakness. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Baron Opportunity Fund highlighted stocks like Apple Inc. (NASDAQ:AAPL), in the second quarter 2024 investor letter. Apple Inc. (NASDAQ:AAPL) is an American multinational company that designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. The one-month return of Apple Inc. (NASDAQ:AAPL) was 0.67%, and its shares gained 27.81% of their value over the last three months. On August 20, 2024, Apple Inc. (NASDAQ:AAPL) stock closed at $226.51 per share with a market capitalization of $3.444 billion.
Baron Opportunity Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:
“This quarter we re-initiated a position in Apple Inc. (NASDAQ:AAPL), a leading technology company known for its innovative consumer electronics products like the iPhone, MacBook, iPad, and Apple Watch. Apple is a leader across its categories and geographies, with a growing installed base that now exceeds 2 billion devices globally. The company’s attached services – including the App Store, iCloud, Apple TV+, Apple Music, and Apple Pay – provide a higher margin, recurring revenue stream that both enhances the value proposition for its hardware products and improves the financial profile. Apple now has well over 1 billion subscribers paying for these services, more than double the number it had just 4 years ago. The increasing services mix has led to healthy operating margin improvement, providing more free cash flow for Apple to reinvest in the business and to distribute to shareholders. Throughout its 48-year history, Apple has successfully navigated and capitalized on major technological shifts, from PCs to mobile to cloud computing. We believe the company’s leading brand and device ecosystem position it to do equally well in the AI age, and this was the driver of our decision to re-invest. “Apple Intelligence” – the AI strategy unveiled at Apple’s recent Worldwide Developer Conference – leverages on[1]device AI and integrations with tools like ChatGPT to enhance user experiences across its ecosystem. The AI suite enables users to create new images, summarize and generate text, and use Siri to perform actions across their mobile applications, all while maintaining user privacy and security. We think Apple Intelligence can drive accelerated product upgrade cycles and higher demand for Apple services. The combination of growth re-acceleration, increasing services contribution, and thoughtful capital allocation should continue driving long-term shareholder value.”
A busy sidewalk filled with people using Apple devices like iPhones, iPads and Apple Watches.
Apple Inc. (NASDAQ:AAPL) is in 9th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 184 hedge fund portfolios held Apple Inc. (NASDAQ:AAPL) at the end of the second quarter which was 150 in the previous quarter. In the June quarter Apple Inc. (NASDAQ:AAPL) delivered $85.8 billion in revenues, up 5% from a year ago. While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL) 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.
In another article, we discussed Apple Inc. (NASDAQ:AAPL) and shared Jim Cramer’s top bullish stock picks. 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.
