ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the gap in equity leadership narrowed considerably as mega-cap growth stocks reaffirmed their dominance and obscured weakness in most of the market. The S&P 500 Index rose 4.28% while the NASDAQ Composite advanced 8.26% for the period compared to a 3.28% decline for the small-cap Russell 2000 Index. The strategy underperformed its Russell 1000 Growth Index benchmark in the quarter and delivered gains across five of the 10 sectors it invested in, on an absolute basis. The IT was the primary contributor while the consumer staples and industrials detracted from the performance. Overall stock selection and sector allocation detracted from performance, on a relative basis. In addition, please check the fund’s top five holdings to know its best picks in 2024.
ClearBridge Large Cap Growth Strategy highlighted stocks like NVIDIA Corporation (NASDAQ:NVDA), in the second quarter 2024 investor letter. NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute and networking solutions. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was 3.32%, and its shares gained 198.32% of their value over the last 52 weeks. On July 5, 2024, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $125.83 per share with a market capitalization of $3.095 trillion.
ClearBridge Large Cap Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“Boosted by NVIDIA Corporation (NASDAQ:NVDA) and a handful of other semiconductor stocks riding the momentum of generative AI demand, the benchmark Russell 1000 Growth Index jumped 8.34%, outperforming the Russell 1000 Value Index by 1,050 basis points. The second quarter marked the fourth time since 2020 that quarterly style dispersion exceeded 1,000 bps in favor of growth. The Magnificent Seven contributed 8.31% of the Russell 1000 Growth’s gain, led by Nvidia and Apple, meaning that seven mega caps were responsible for nearly 100% of index performance. This also increased the weighting of the group from 48% to 55% of the benchmark (compared to the ClearBridge Large Cap Growth Strategy’s 39% weighting). Three stocks — Microsoft, Apple and Nvidia — now maintain greater than 10% positions in the benchmark.
While the Strategy continues to have a significant position in Nvidia, with the stock’s strong price appreciation during the quarter offsetting position management trims, we are underweight semiconductors versus the benchmark. That exposure worked against us in a sentiment-driven period for chipmakers tied to AI.”
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA) is in 5th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 186 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the first quarter which was 173 in the previous quarter. NVIDIA Corporation (NASDAQ:NVDA) reported another record quarter in Q1 with $26 billion in revenues, representing a 262% year-over-year increase. While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) 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 NVIDIA Corporation (NASDAQ:NVDA) in another article and shared the list of best AI stocks for the second half of 2024. In addition, please check out our hedge fund investor letters Q2 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.
