Fred Alger Management, an investment management company, released its “Alger Mid Cap Focus Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. equities experienced positive outcome largely driven by decisive U.S. presidential election outcome. Class A shares of the fund outperformed the Russell Midcap Growth Index in the quarter. The Information Technology and Industrials sectors contributed to relative performance while Financials and Utilities detracted. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Alger Mid Cap Focus Fund 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 4.16%, and its shares gained 670.50% of their value over the last 52 weeks. On January 16, 2025, AppLovin Corporation (NASDAQ:APP) stock closed at $332.01 per share with a market capitalization of $111.42 billion.
Alger Mid Cap Focus Fund stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q4 2024 investor letter:
“AppLovin Corporation (NASDAQ:APP) is an advertising technology company offering a digital platform that helps mobile app developers market, monetize, and analyze their apps. We believe the company is experiencing a positive lifecycle change, driven by its AI-powered software engine. While currently focused on mobile gaming, AppLovin is expanding into other market segments. Its Demand Side Platform (DSP) supports ad placements, user acquisition, inventory matching, and performance analytics. Further, we believe AI is central to AppLovin’s growth, driving a large majority of the company’s revenue through its recommendation and targeting engine. In our view, AppLovin gains a competitive advantage, delivering higher-value app installs by leveraging data from its game portfolio and developer partners. We believe this scale and data advantage enhances its network effect, improving its technology and boosting market share in mobile gaming. As developers use the platform, the company collects data that continuously refines its algorithms, creating more value and attracting more developers to the ecosystem. During the quarter, shares contributed to performance following better-than-expected fiscal third quarter results, reporting a 39% year-over-year (yoy) revenue growth, along with a substantial 182% yoy growth in free cash flow. The company has also been proactive in shareholder returns, authorizing $2.30 billion for share repurchases.”
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 on latest analyst ratings and news. ClearBridge Growth Strategy initiated a position in AppLovin Corporation (NASDAQ:APP) during Q4 2024, to benefit from the development in AI technology. In addition, please check out our hedge fund investor letters Q4 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.