ClearBridge Investments, an investment management company, released its “ClearBridge Growth Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. Due to stock-specific weakness in a handful of holdings and a lack of exposure to several of the top-performing, higher-beta growth companies, the strategy underperformed its benchmark the Russell Mid Cap Growth Index in a momentum-driven market. Following Trump’s victory, small-cap, value, and cyclical shares saw a spike in price; however, growth stocks regained their lead by the end of the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.
ClearBridge Growth Strategy highlighted stocks like AppLovin Corporation (NASDAQ:APP), in the fourth quarter 2024 investor letter. 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 0.92%, and its shares gained 694.79% of their value over the last 52 weeks. On January 8, 2025, AppLovin Corporation (NASDAQ:APP) stock closed at $329.20 per share with a market capitalization of $110.477 billion.
ClearBridge Growth Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q4 2024 investor letter:
“To promote balance, manage risk and augment the portfolio’s growth characteristics, we continued to take profits in some of our more established, larger holdings to seed new purchases. We believe that the arms race and value unlock from AI will provide a multiyear tailwind to a number of companies in our coverage. To maintain exposure to this theme, we used some of our profit taking in Broadcom to initiate new positions in AI-levered names AppLovin Corporation (NASDAQ:APP) and Palantir.
AppLovin is the world’s leading mobile game and app advertising platform, providing software for marketing and monetization, powered by its proprietary AI targeting engine Axon. We see opportunity for AppLovin to continue to expand and grow its share of the market for mobile app marketing, at a time when mobile gaming ad spend is recovering from a higher-rate-driven trough. We also see the potential for the company to expand its addressable market to include e-commerce advertising, around which early checks have been encouraging. With strong incremental margins and management keeping expenses controlled, the company should be able to drive significant free cash flow growth as revenue continues to scale.”
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, 51 hedge fund portfolios held AppLovin Corporation (NASDAQ:APP) at the end of the third quarter which was 54 in the previous quarter. AppLovin Corporation (NASDAQ:APP) reported an outstandings third quarter, generating $1.2 billion in total revenue and $722 million in adjusted EBITDA, achieving a 60% 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.
In another article, we discussed AppLovin Corporation (NASDAQ:APP) and shared the list of AI stocks that skyrocketed in Q4 2024 along with experts’ opinions on the future of AI. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.