Fred Alger Management, an investment management company, released its “Alger Focus Equity Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. US markets performed strongly in Q1, with the S&P Index up 10.56%. Class A shares of the fund outperformed the Russell 1000 Growth Index in the quarter. Information Technology and industrial sectors boosted the relative performance while financials and consumer staples weighed down the fund’s performance in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Alger Focus Equity Fund highlighted stocks like Microsoft Corporation (NASDAQ:MSFT), in the first quarter 2024 investor letter. Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions. The one-month return of Microsoft Corporation (NASDAQ:MSFT) was 8.67%, and its shares gained 36.26% of their value over the last 52 weeks. On July 3, 2024, Microsoft Corporation (NASDAQ:MSFT) stock closed at $460.77 per share with a market capitalization of $3.425 trillion.
Alger Focus Equity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. The company operates through three segments: Productivity and Business Processes (Office, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows. Devices, Gaming, and Search). During the quarter, shares contributed to performance after the company reported strong fiscal second quarter results, underscoring its leadership position in the cloud and highlighted its role as a primary facilitator and beneficiary of Al adoption. Company revenue growth, operating margin, and earnings growth surpassed consensus expectations. The utility scale Azure cloud business grew 28% in constant currency of which 6% was Al related versus 3% last quarter. Further, management noted most of the Al revenue was from inference rather than training indicating high quality Al applications by Microsoft’s clients. Management also indicated that significant cost-cutting programs in corporate America have begun to trail off. suggesting that the cost optimization headwinds previously impacting Azure’s growth are abating. We continue to believe that Microsoft has the potential to hold a leading position in Al. given its innovative approach and demonstrated high unit volume growth opportunity.”
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT) is in second position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 293 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the first quarter which was 302 in the previous quarter. It was a record quarter for Microsoft Corporation (NASDAQ:MSFT), driven by continued strength in the Microsoft Cloud. The company reported $61.9 billion in revenues, up 17% year over year. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) 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 discussed Microsoft Corporation (NASDAQ:MSFT) in another article and shared the list of best cloud computing stocks to buy. In addition, please check out our hedge fund investor letters Q1 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.
