Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund increased 12.6% (Institutional Shares) in the first quarter compared to an 11.4% gain for the Russell 1000 Growth Index and a 10.6% increase for the S&P 500 Index. Despite higher interest rates, the US economy continues to surpass expectations. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Fifth Avenue Growth Fund highlighted stocks like NVIDIA Corporation (NASDAQ:NVDA), in the first quarter 2024 investor letter. NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute and networking solutions. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was 21.32%, and its shares gained 173.38% of their value over the last 52 weeks. On May 24, 2024, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $1,064.69 per share with a market capitalization of $2.619 trillion.
Baron Fifth Avenue Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its first quarter 2024 investor letter:
“Even after taking some profits in the first quarter, NVIDIA Corporation (NASDAQ:NVDA) remains the Fund’s largest position. We believe NVIDIA continues to be at the epicenter of one of the biggest technological paradigm shifts of the last 50 years as computing is shifting from sequential to accelerated and as we begin to see the early stages of the use cases of generative AI (GenAI) enter the mainstream. Is GenAI real? Is it going to be material, sustainable, and disruptive? Will NVIDIA (and other GenAI leaders and disruptors) likely benefit from this disruptive change? Our research suggests that the answer to all of these questions is an unequivocal – yes
Is there hype around GenAI? Sure. There is always a hype cycle around major new technologies. Is GenAI a bubble similar to what we saw during the internet bubble of late 1990s/early 2000s? We don’t think so. First of all, it is important to recognize that while there were many stocks trading at silly valuations on newly invented metrics (peak multiples on peak eyeballs), the internet itself proved to be a paradigm changing disruption, giving birth to a plethora of Big Ideas. But even more importantly, while the rise in NVIDIA’s stock price has been nothing short of unprecedented for a company of its size, it was fueled almost entirely by rapid growth in revenues, earnings, and cash flows – not multiples. NVIDIA’s stock price exited 2023 with a P/E ratio of 24.7 and ended the first quarter with a P/E ratio of 354. We can debate whether it is cheap or expensive, but it cannot be compared to the triple-digit multiples that were assigned to the perceived market leaders of the early internet era who were clearly not in as strong of a competitive position then, as NVIDIA is today…” (Click here to read the full text)
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA) reported another record quarter in Q1. The company generated $26 billion in revenues in the quarter, 262% year-on-year increase.
NVIDIA Corporation (NASDAQ:NVDA) is in 5th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 186 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the first quarter which was 173 in the previous quarter.
In another article, we discussed NVIDIA Corporation (NASDAQ:NVDA) and shared the list of best quantum computing stocks to invest in. NVIDIA Corporation (NASDAQ:NVDA) was one of the top contributors of Aristotle Atlantic’s Focus Growth Strategy in the first quarter 2024. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.
If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
