Fred Alger Management, an investment management company, released its “Alger Spectra Fund” fourth quarter 2024 investor letter. A copy of the investor letter can be downloaded here. U.S. equities showed positive performance in the fourth quarter, primarily fueled by a clear outcome in the U.S. presidential election. Against this backdrop, the fund’s Class A shares outperformed the Russell 3000 Growth Index in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 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 Microsoft Corporation (NASDAQ:MSFT) was -2.65%, and its shares lost 0.20% of their value over the last 52 weeks. On February 5, 2024, Microsoft Corporation (NASDAQ:MSFT) stock closed at $413.29 per share, with a market capitalization of $3.072 trillion.
Alger Spectra Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q4 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 (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, Microsoft delivered better-than-expected fiscal first-quarter revenues, beating analyst estimates across all three segments. In the Intelligent Cloud business, Azure revenue grew 34% year[1]over-year, slightly above consensus, with AI Services contributing 12% to Azure’s growth, up from 11% in the previous quarter, as demand for AI continues to outpace capacity. However, shares declined after management signaled a potential deceleration in Azure growth for the next quarter and highlighted a negative earnings impact from OpenAI-related losses. Additionally, concerns over significantly increased AI-related capital expenditures (CapEx) raised questions about short-term profitability despite the long-term growth potential. While these near-term challenges led to shares detracting from performance for the quarter, we remain confident in Microsoft’s ability to maintain its leadership 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, 279 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the third quarter which was 279 in the previous 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.
In another article we discussed Microsoft Corporation (NASDAQ:MSFT) and shared the list of best wide moat stocks to invest in. In addition, please check out our hedge fund investor letters Q3 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.