ClearBridge Investments, an investment management company, released its “ClearBridge Mid Cap Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Though initially positive, stories on possible tariffs, global trade conflict, and a rotation out of AI-related tech firms send equities lower in the first quarter. In this environment, the ClearBridge Mid Cap Strategy underperformed the benchmark, Russell Midcap Index in the quarter, due to idiosyncratic headwinds, strengthened by the market volatility; put pressure on several of strategy’s technology and industrial holdings. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first quarter 2025 investor letter, ClearBridge Mid Cap Strategy emphasized stocks such as AppLovin Corporation (NASDAQ:APP). AppLovin Corporation (NASDAQ:APP) develops a software-based platform for advertisers to enhance the marketing and monetization of their content. The one-month return of AppLovin Corporation (NASDAQ:APP) was -9.92%, and its shares gained 249.12% of their value over the last 52 weeks. On April 10, 2025, AppLovin Corporation (NASDAQ:APP) stock closed at $263.83 per share with a market capitalization of $89.691 billion.
ClearBridge Mid Cap Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q1 2025 investor letter:
“AI-beneficiary and strong fourth-quarter performer AppLovin Corporation (NASDAQ:APP) came under pressure from several reports from short sellers seeking to capitalize on a reversal in the company’s strong momentum amid the broader tech retreat. However, we believe the AI-enabled advertising software platform continues to be one of the best AI opportunities within the mid cap market. Recent positive channel indicators for its e-commerce business point toward a solid and persistent future of attractive returns for AppLovin, and we used the short-natured weakness to add to our position.”
A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform.
AppLovin Corporation (NASDAQ:APP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 95 hedge fund portfolios held AppLovin Corporation (NASDAQ:APP) at the end of the fourth quarter compared to 51 in the third quarter. AppLovin Corporation (NASDAQ:APP) reported strong fourth quarter with total revenue increasing 44% year over year to $1.37 billion and adjusted EBITDA increasing 78% to $848 million, achieving a 62% adjusted EBITDA margin. While we acknowledge the potential of AppLovin Corporation (NASDAQ:APP) 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 covered AppLovin Corporation (NASDAQ:APP) in another article, where we shared the list of best long term growth stocks to buy according to billionaires. AppLovin Corporation (NASDAQ:APP) was the greatest contributor to ClearBridge Mid Cap Strategy’s performance during Q4 2024. In addition, please check out our hedge fund investor letters Q1 2025 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.