Fred Alger Management, an investment management company, released its “Alger Spectra Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, changing trade, monetary, and fiscal policies created increased volatility in U.S. stocks. The introduction of advanced artificial intelligence (AI) models from China was a further source of uncertainty. Against this backdrop, the fund’s Class A shares underperformed the Russell 3000 Growth Index in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first quarter 2025 investor letter, Alger Spectra Fund emphasized stocks such as Microsoft Corporation (NASDAQ:MSFT). 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 0.54%, and its shares lost 6.34% of their value over the last 52 weeks. On April 15, 2025, Microsoft Corporation (NASDAQ:MSFT) stock closed at $385.73 per share with a market capitalization of $2.868 trillion.
Alger Spectra Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2025 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 (Office365, 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 detracted from performance as Azure revenue growth missed analyst estimates, marking the third consecutive quarter of modest disappointment in this segment. However, AI-related sales growth exceeded expectations, accounting for 13% of Azure’s quarterly growth. Management also maintained their fiscal third quarter earnings guidance while highlighting improved operating profitability and lower tax rates. Despite the disappointing quarter, we remain confident in Microsoft’s ability to sustain its leadership position in AI.”
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT) is in second position our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 317 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the fourth quarter compared to 279 in the third quarter. In the fiscal second quarter of 2025, Microsoft Corporation (NASDAQ:MSFT) reported $69.6 billion in revenues, up 12% 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 covered Microsoft Corporation (NASDAQ:MSFT) in another article, where we shared the list of best NASDAQ stocks to buy so far in 2025. 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.