Renaissance Investment Management, an investment management company, released its Q4 2024 “Large Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. US stocks delivered robust results in the fourth quarter with the S&P 500 reporting positive results for the fifth consecutive quarter. The stocks rose after Trump’s election due to optimism for corporate earnings growth, but December’s hawkish Fed comments dampened enthusiasm by lowering rate cut expectations for 2025. In the fourth quarter, the Russell 1000 Growth gained +7.1%, compared to a 2.4% return for the S&P 500. Large-cap stocks outperformed both mid and small-cap stocks, and Growth significantly outperformed Value. The returns were largely driven by a small group of mega-cap technology companies, as interest in AI-related stocks remains strong. Against this backdrop, the strategy outperformed the S&P 500 and underperformed the Russell 1000 Growth in the fourth quarter. For more information on the fund’s best picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, Renaissance Large Cap Growth Strategy emphasized stocks such as AppLovin Corporation (NASDAQ:APP). 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 -19.6%, and its shares gained 278.07% of their value over the last 52 weeks. On March 27, 2025, AppLovin Corporation (NASDAQ:APP) stock closed at $261.70 per share with a market capitalization of $88.967 billion.
Renaissance Large Cap Growth Strategy stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q4 2024 investor letter:
“AppLovin Corporation (NASDAQ:APP) was our strongest performing stock in the fourth quarter. Early indications from third-party advertising agencies are further confirming that AppLovin’s e-commerce platform is producing solid returns on targeted advertising spending. Momentum in growing its software advertising platform signals the company’s ability to diversify into e-commerce, opening up much larger revenue opportunities in web advertising. We also see the company’s data-driven improvements generating an exponential increase in data accumulation that is integral to both the development and refinement of its AI models.”
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, 95 hedge fund portfolios held AppLovin Corporation (NASDAQ:APP) at the end of the fourth quarter compared to 51 in the third quarter. AppLovin Corporation (NASDAQ:APP) reported strong fourth quarter with total revenue increasing 44% year over year to $1.37 billion and adjusted EBITDA increasing 78% to $848 million, achieving a 62% 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.
We covered AppLovin Corporation (NASDAQ:APP) in another article, where we shared the list of top stocks to buy according to Jericho Capital Asset Management. AppLovin Corporation (NASDAQ:APP) was the greatest contributor to ClearBridge Mid Cap Strategy’s performance during Q4 2024. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.