Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the U.S. large cap was once again the place to be. The fund increased 5.7% (Institutional Shares) in the second quarter compared to an 8.3% gain for the Russell 1000 Growth Index and a 4.3% increase for the S&P 500 Index. Year to date, the fund returned 19.1% compared to 20.7% and 15.3% gains for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Fifth Avenue Growth Fund highlighted stocks like Cloudflare, Inc. (NYSE:NET), in the second quarter 2024 investor letter. Cloudflare, Inc. (NYSE:NET) is a cloud services provider that delivers a range of services to businesses worldwide. The one-month return of Cloudflare, Inc. (NYSE:NET) was 5.71%, and its shares gained 28.36% of their value over the last 52 weeks. On August 30, 2024, Cloudflare, Inc. (NYSE:NET) stock closed at $82.14 per share with a market capitalization of $28.067 billion.
Baron Fifth Avenue Growth Fund stated the following regarding Cloudflare, Inc. (NYSE:NET) in its Q2 2024 investor letter:
“Cloudflare, Inc. (NYSE:NET) provides content delivery network services, cloud cybersecurity, denial-of-service mitigation, Domain Name Service, and ICANN-accredited domain registration services. Shares fell 14.4% during the quarter on remarks from the CEO about worsening macro conditions, citing the negative impact of geopolitical uncertainties on customer buying behavior. On the positive side, the company posted strong quarterly results with revenue growth of 30% year-over-year, showing evidence that the changes to the company’s go-to-market strategy were resonating with solid growth across its large customer cohorts (revenues from customers spending over $100,000 represented 67% of the total, up from 62% in the first quarter of 2023), double-digit improvement in sales productivity, and new pipeline attainment ahead of plan. Cloudflare reiterated revenue guidance for the year on resilience in cybersecurity spend. While we fine-tuned our model on the back of the company’s increased macro headwind commentary, pushing out revenue reacceleration estimates from the second quarter of 2024 to the first quarter of 2025, this is still ahead of guidance. We retain conviction in the long-term thesis: a strong founder-led business with a unique global network and significant pricing advantages powering a disruptive multi-product growth story with improving margins. We therefore remain shareholders.”
A close-up of a server array powering a cloud-services system.
Cloudflare, Inc. (NYSE:NET) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Cloudflare, Inc. (NYSE:NET) at the end of the second quarter which was 44 in the previous quarter. In the second quarter Cloudflare, Inc. (NYSE:NET) reported $401 million in revenues up 30% year-over-year. While we acknowledge the potential of Cloudflare, Inc. (NYSE:NET) 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 Cloudflare, Inc. (NYSE:NET) and shared the list of best cybersecurity stocks to buy according to hedge funds. 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.
