L1 Capital, an investment management firm, released its “L1 Capital International Fund” (unhedged) first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned 0.1% (net of fees) in the March quarter surpassing the benchmark return by 2.6% (all in Australian dollars). The Australian dollar appreciated 1.0% against the U.S. dollar in the quarter and 3.4% against the Euro. During the first quarter of 2025, the market performance by sector was mixed. In addition, the letter discussed on trade deficits, Trump administration’s Reciprocal Tariffs, implications of Liberation Day and the shift in Trump’s trade policy and how the firm is managing the fund in this volatile environment. Please check the fund’s top five holdings to know its best picks in 2025.
In its first quarter 2025 investor letter, L1 Capital International Fund emphasized stocks such as Alphabet Inc. (NASDAQ:GOOG). 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 -7.31%, and its shares lost 2.40% of their value over the last 52 weeks. On April 10, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $155.37 per share with a market capitalization of $1.877 trillion.
L1 Capital International Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:
“The Fund has investments in three of the Magnificent 7: Amazon.com, Microsoft, and a smaller position size in Alphabet Inc. (NASDAQ:GOOG). As noted, the market remains concerned about elevated capital expenditure, the returns the leading Cloud and AI service providers will earn on these immense levels of capex and, more recently, concerns on overall cloud and AI services demand as well as increasing general economic weakness. There are also increasing concerns that Alphabet’s competitive position in Search will not be as strong in an AI-centric world. More recently, trade policy concerns are pressuring all companies, and there have been huge equity market flows from short term investors derisking their portfolios as well as likely passive investor selling pressure. While operating conditions have weakened to some extent, at current share prices, all three businesses are trading well below our base case fair value range and offer highly attractive risk adjusted returns for investors with a longer-term investment horizon.
Earlier in calendar 2025 we trimmed investments in companies such as Alphabet when the share price increased to around the top end of our assessment of fair value.”
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 30 Most Popular Stocks Among Hedge Funds. As per our database, 174 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the fourth quarter which was 160 in the previous quarter. In 2024, Alphabet Inc. (NASDAQ: GOOG) achieved a revenue growth of 14% compared to 2023, reaching $350 billion. For the fourth quarter, the revenue was $96.5 billion, reflecting a 12% increase in both reported and constant currency. 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.
We covered Alphabet Inc. (NASDAQ:GOOG) in another article, where we shared GreensKeeper Asset Management’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 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.