Parnassus Investments, an investment management company, released the “Parnassus Mid Cap Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the Fund (Investor Shares) returned 8.55% (net of fees) outperforming the Russell Midcap Index’s 6.54% return. Stock selection in Health Care sector drove the outperformance of the portfolio while stock selection within Real Estate detracted. The Fund’s focus on quality characteristics has benefited from reduced cyclical pressures and company-specific opportunities. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Parnassus Mid Cap Fund highlighted stocks like Cloudflare, Inc. (NYSE:NET), in the third quarter 2024 investor letter. Cloudflare, Inc. (NYSE:NET) is a cloud services provider that delivers a range of services to businesses worldwide. The one-month return of Cloudflare, Inc. (NYSE:NET) was 27.98%, and its shares gained 35.09% of their value over the last 52 weeks. On December 12, 2024, Cloudflare, Inc. (NYSE:NET) stock closed at $114.89 per share with a market capitalization of $39.43 billion.
Parnassus Mid Cap Fund stated the following regarding Cloudflare, Inc. (NYSE:NET) in its Q3 2024 investor letter:
“In Software, we added Autodesk and Cloudflare, Inc. (NYSE:NET) while exiting Bill.com. Cloudflare has built its own internet network, providing its customers with lower latency and better security. Cloudflare allows companies to access the internet faster and with greater security. The company is building new offerings on top of its network, allowing it to widen its competitive moat with high incremental margins. Cloudflare has a large addressable market that we believe provides a long runway for growth.”
A close-up of a server array powering a cloud-services system.
Cloudflare, Inc. (NYSE:NET) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held Cloudflare, Inc. (NYSE:NET) at the end of the third quarter which was 39 in the previous quarter. In the third quarter, Cloudflare, Inc. (NYSE:NET) reported $430.1 million in revenues, up 28% year-over-year. While we acknowledge the potential of Cloudflare, Inc. (NYSE:NET) 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 Cloudflare, Inc. (NYSE:NET) and shared AI news investors probably missed. In addition, please check out our hedge fund investor letters Q3 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.