Alphyn Capital Management, an investment management firm, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The Master Account of the fund returned 8.9% net in the third quarter compared to 5.9% for the S&P500 Index. As of September 30, 2024, the top ten holdings accounted for approximately 71% of the portfolio, and approximately 9% of the portfolio was held in cash. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Alphyn Capital Management highlighted stocks like Alphabet Inc. (NASDAQ:GOOG) in its Q3 2024 investor letter. Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was 4.83%, and its shares gained 16.23% of their value over the last 52 weeks. On October 9, 2024, Alphabet Inc. (NASDAQ:GOOG) stock closed at $163.06 per share with a market capitalization of $1.999 trillion.
Alphyn Capital Management stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q3 2024 investor letter:
“Alphabet Inc.’s (NASDAQ:GOOG) solid quarterly performance, with revenue growth of 14% and improved margins improving from 29% to 32%, has been overshadowed by ongoing investor concerns regarding future capital expenditures for AI and antitrust risks.
In August, a federal judge ruled that Google illegally monopolized the search and advertising markets in the United States by using exclusive agreements with browser developers, smartphone makers, and wireless carriers. A second trial is scheduled for 2025 to determine enforcement remedies, with a final decision not likely before 2026, given the strong likelihood of Alphabet appealing any decision. Potential remedies may include making search engine data available to competitors and ending agreements to secure its search engine as a default on mobile devices. For example, Alphabet currently pays $20 billion annually for Google to be the default search engine on Apple products. Although regulatory challenges are never positive, Google’s strong brand and consumer preference have limited the impact of previous restrictions. In Europe, Russia, and Turkey, Google search market share declined by only 2%, 7%, and 12%, respectively, when regulators limited its use as the default option.
Another trial focuses on Alphabet’s Ad Tech platform, where the DOJ alleges that the company has monopolized the digital advertising market. Closing arguments are expected in the coming weeks, and a ruling against Alphabet could undermine Google’s dominance in the online advertising ecosystem. Additionally, after the end of the quarter, Alphabet was ordered to open its Android operating system to rivals, allowing them to establish their own app marketplaces and payment systems to compete with Google Play Store. This followed a loss to Epic Games, the developer behind Fortnite, in a December ruling last year. I will continue to monitor these developments and respond accordingly.”
A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 165 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the second quarter which was 165 in the previous quarter. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) 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 Alphabet Inc. (NASDAQ:GOOG) and shared the list of trending AI stocks in October. 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.