Fred Alger Management, an investment management company, released its “Alger Weatherbie Specialized Growth Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. stocks saw gains in the fourth quarter, primarily fueled by a clear result in the U.S. presidential election. Against this backdrop, Class A shares of the fund outperformed the Russell 2500 Growth Index in the quarter. The Health Care and Financials sectors contributed to the fund’s performance in the quarter, while Industrials and Energy sectors detracted. 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 Weatherbie Specialized Growth Fund emphasized stocks such as Upstart Holdings, Inc. (NASDAQ:UPST). Upstart Holdings, Inc. (NASDAQ:UPST) is a US based a cloud-based artificial intelligence (AI) lending platform. The one-month return of Upstart Holdings, Inc. (NASDAQ:UPST) was 2.17%, and its shares gained 167.11% of their value in the last 52 week. On February 26, 2025, Upstart Holdings, Inc. (NASDAQ:UPST) stock closed at $68.78 per share with a market capitalization of $6.445 billion.
Alger Weatherbie Specialized Growth Fund stated the following regarding Upstart Holdings, Inc. (NASDAQ:UPST) in its Q4 2024 investor letter:
“Upstart Holdings, Inc. (NASDAQ:UPST) is a leading AI-powered lending platform that partners with banks and credit unions to improve access to affordable credit. By leveraging machine learning algorithms, the company evaluates non-traditional risk factors to provide more accurate credit assessments, enabling better loan approvals and pricing. Upstart aims to make the lending process more inclusive and efficient while helping its financial institution partners drive growth and manage risk effectively. Shares contributed to performance during the quarter after the company reported solid fiscal third quarter revenues that beat analyst estimates. In our view, the quarter highlighted recovering origination volumes, product expansion efforts, improved funding partnerships, and a return to positive adjusted earnings-before-interest-taxes-depreciation-amortization (EBITDA). Management emphasized that the volume growth stemmed from updated underwriting models rather than new funding partnerships. Additionally, Upstart’s funding profile has significantly improved compared to a year ago, supported by forward flow partnerships and a successful return to the asset-backed securities (ABS) markets with tightening credit spreads.”
A close-up of a businesswoman using a laptop, being illuminated by the AI-enabled cloud interface sponsored by the company.
Upstart Holdings, Inc. (NASDAQ:UPST) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Upstart Holdings, Inc. (NASDAQ:UPST) at the end of the fourth quarter compared to 29 in the third quarter. Upstart Holdings, Inc. (NASDAQ:UPST)’s net revenue for the fourth quarter reached around $219 million, which represents a 56% increase compared to the same period last year and a 35% rise from the previous quarter. While we acknowledge the potential of Upstart Holdings, Inc. (NASDAQ:UPST) 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 Upstart Holdings, Inc. (NASDAQ:UPST) and shared the list of high-flying AI stocks on news and ratings. In addition, please check out our hedge fund investor letters Q4 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.