Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund experienced an excellent quarter to end another successful year. The fund increased 11.7% (Institutional Shares) in the fourth quarter compared to a 7.1% gain for the Russell 1000 Growth Index and a 2.4% increase for the S&P 500 Index. For the full year, the fund returned 37.8% compared to 33.4% and 25.0% gains for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Baron Fifth Avenue Growth Fund emphasized stocks such as Shopify Inc. (NYSE:SHOP) in its Q4 2024 investor letter. Headquartered in Ottawa, Canada, Shopify Inc. (NYSE:SHOP) provides a cloud-based commerce platform and services. The one-month return of Shopify Inc. (NYSE:SHOP) was 7.62%, and its shares gained 48.99% of their value over the last 52 weeks. On February 21, 2025, Shopify Inc. (NYSE:SHOP) stock closed at $115.56 per share with a market capitalization of $150.228 billion.
Baron Fifth Avenue Growth Fund stated the following regarding Shopify Inc. (NYSE:SHOP) in its Q4 2024 investor letter:
“Shopify Inc. (NYSE:SHOP) is a cloud-based software provider for multi-channel commerce. Shares rose 32.7% in the fourth quarter, finishing 2024 up 36.5% on strong financial results, including year-over-year revenue growth of 26% thanks to continued market share gains with gross merchandise value growth of 24%. Shopify reported continued success in its original online commerce segment while also expanding into offline, international, and business-to-business (B2B), which grew 27%, 30%, and 145%, respectively. Operating margins of 18% came in 240bps above expectations. While the company again guided for an accelerated pace of reinvestments into the business, which will limit short-term margin expansion, we believe this is the correct long-term strategy, as Shopify is taking advantage of its continuously improving product set and maturing go-to-market, in order to further expand its addressable market, targeting international merchants, offline and B2B retailers and going up market. We remain shareholders due to Shopify’s strong competitive positioning, innovative culture, and long runway for growth, as it still holds less than a 2% share of the global commerce market.”
Shopify Inc. (NYSE:SHOP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held Shopify Inc. (NYSE:SHOP) at the end of the fourth quarter compared to 56 in the third quarter. Shopify Inc.’s (NYSE:SHOP) fourth quarter revenue was $2.8 billion, up 31% year-over-year, and full-year revenue was up 26% to $8.9 billion. While we acknowledge the potential of Shopify Inc. (NYSE:SHOP) 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 Shopify Inc. (NYSE:SHOP) and shared the list of best global stocks to buy according to hedge funds. 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.