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Strong Results Lifted Stepstone Group (STEP) in Q2

Fred Alger Management, an investment management company, released its “Alger Weatherbie Specialized Growth Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter of 2024, U.S. equities performed well, with the S&P 500 rising 4.28%. Against this backdrop, Class A shares of the fund outperformed the Russell 2500 Growth Index in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Alger Weatherbie Specialized Growth Fund highlighted stocks like StepStone Group LP (NASDAQ:STEP) in the second quarter 2024 investor letter. StepStone Group LP (NASDAQ:STEP) is private equity and venture capital firm. The one-month return of StepStone Group Inc. (NASDAQ:STEP) was 15.94%, and its shares gained 77.42% of their value over the last 52 weeks. On August 30, 2024, StepStone Group Inc. (NASDAQ:STEP) stock closed at $54.70 per share with a market capitalization of $6.323 billion.

Alger Weatherbie Specialized Growth Fund stated the following regarding StepStone Group Inc. (NASDAQ:STEP) in its Q2 2024 investor letter:

StepStone Group Inc. (NASDAQ:STEP) is a private markets investment firm that focuses on providing customized investment solutions and advisory and data services to clients. The company serves public and private defined benefit and defined contribution pension funds, sovereign wealth funds, insurance companies, prominent endowments, foundations, family offices and private wealth clients, which include high-net-worth and mass affluent individuals. During the quarter, shares contributed to performance following strong fiscal fourth-quarter results, with revenues and earnings beating analyst estimates. Better-than-expected revenues were attributed to higher realized carried interest and increased fees from co-mingled funds, particularly due to a favorable mix and strong growth in their high-margin Evergreen Funds. The quarter also featured robust fundraising activity, with management providing a positive forward outlook.”

A confident businessman in a sharp suit and tie overlooking a financial trading floor.

StepStone Group Inc. (NASDAQ:STEP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held StepStone Group Inc. (NASDAQ:STEP) at the end of the second quarter which was 10 in the previous quarter.  GAAP net income of StepStone Group Inc. (NASDAQ:STEP) in the fourth quarter of fiscal 2024 was $82.5 million including $30.8 million or $0.48 per share attributable to StepStone Group Incorporated. While we acknowledge the potential of StepStone Group Inc. (NASDAQ:STEP) 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 StepStone Group Inc. (NASDAQ:STEP) and shared Alger Weatherbie Specialized Growth Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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