In this article, we will take a detailed look at Top 10 Stocks to Buy According to Lee Munder Capital Group.
Lee Munder Capital Group Investments, more commonly known as LMCG Investments, LLC, is an independent, employee-owned investment management company. Established in 2000 as Lee Munder Capital Group, it has 25 years of average investment experience and typically deals with alternative investments and wealth management. Specifically, the globally focused investment management firm provides a diverse array of investment strategies tailored to institutional investors, financial advisors, and private clients. The firm specializes in global equity, fixed income, and absolute return or relative value credit strategies. With a client-first approach, LMCG prioritizes aligning its interests with those of its investors, emphasizing transparency and long-term value creation. By leveraging its expertise and disciplined investment approach, the firm aims to deliver strong financial performance and best-in-class investment solutions. Founded and managed by Lee Munder himself, the firm has established a strong reputation in the financial industry.
As of March 2024, LMCG Investments manages discretionary assets totaling approximately $5.5 billion, serving 1,527 clients. The firm reported $1.63 billion in managed 13F securities for the fourth quarter of 2024, with its top 10 holdings making up over 28% of its portfolio. LMCG’s strategic investment approach and diversified portfolio reflect its commitment to delivering strong financial performance and value to its clients.
Munder also established Lee Munder Venture Partners LLC and founded Munder Capital Management. With extensive experience in investment management, Munder has held key positions, including Vice President at Loomis, Sayles & Co. LP. Currently, he serves as Chairman at IC Real Tech, an innovation-driven video technology company. Lee Munder holds an MBA from Wayne State University and an undergraduate degree from Ohio State University. Given this, we will take a look at top 10 stocks in Lee Munder’s portfolio.
Stock market data on a laptop screen. Photo by Alesia Kozik
Our Methodology
The stocks discussed below were picked from LMCG’s 13F filings for the fourth quarter of 2024. They have been compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To provide readers with a more holistic analysis of each stock, we have included the hedge fund sentiment regarding each company using data from over 900 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds show interest in? The reason is simple: our research has shown that we can outperform the market by imitating the latest top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Top 10 Stocks to Buy According to Lee Munder Capital Group
10. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders as of Q3: 69
LMCG’s Equity Stake: $26.02 Million
The Coca-Cola Company (NYSE:KO) is a globally recognized multinational corporation specializing in the production, marketing, and sale of both alcoholic and non-alcoholic beverages. Headquartered in Atlanta, Georgia, the company traces its origins to 1886 when pharmacist John Stith Pemberton used cocaine and caffeine to develop the original Coca-Cola formula as a patent medicine stemming from his effort to control his own opioid addiction. Originally marketed as a “healthy tonic” to the masses when the drink contained cocaine for the cure of opioid addiction, its formula has gone through many revisions to become the popular soft drink of today.
Since the company’s incorporation in 1892, The Coca-Cola Company (NYSE:KO) has expanded significantly, operating in over 200 countries and territories. The company has continuously evolved over the years, reducing added sugar in its drinks and introducing innovative new products to meet changing consumer preferences. The company’s portfolio now includes more than 200 brands, spanning soft drinks, bottled water, coffee, tea, and even alcoholic beverages. Through strategic acquisitions and sustainability efforts, Coca-Cola remains a dominant force in the beverage industry.
The Coca-Cola Company (NYSE:KO) generates revenue through various streams, primarily from its extensive lineup of beverages. Additionally, the company benefits from licensing fees paid by its vast network of bottling and distribution partners, ensuring its products reach global consumers. The company also secures passive earnings from strategic investments across multiple industries. This diversified financial structure, along with its strong brand presence and innovation-driven approach, allows Coca-Cola to maintain its leadership position in the global beverage market.
LMCG owns over 417,938 shares of the company as of Q4 2024, with a total value of $26.02 million. The fund decreased its stake in The Coca-Cola Company (NYSE:KO) by 4% during the fourth quarter of 2024. Overall, by the end of the September quarter, 69 hedge funds out of the 900 funds tracked by Insider Monkey held stakes in KO worth over $34.95 billion, up from 68 funds by the end of Q2, which suggests positive hedge fund sentiment about the stock.
According to James Quincey, Chairman and CEO of The Coca-Cola Company (NYSE:KO), July was a slow month for the company, yet the business trends improved each consecutive month in the quarter, and the company’s year-to-date performance gave them confidence in delivering at the high end of their previous top-line guidance by the end of 2024. Moreover, the company faced nearly double-digit currency headwinds and the impact of bottler re-franchising, which could have affected revenue.
9. The Goldman Sachs Group, Inc. (NYSE:GS)
Number of Hedge Fund Holders as of Q3: 72
LMCG’s Equity Stake: $29.42 Million
The Goldman Sachs Group, Inc. (NYSE:GS) is a leading multinational investment bank and financial services firm. Established in 1869 by Marcus Goldman in New York City, the company initially specialized in commercial paper financing for entrepreneurs. Over the decades, Goldman Sachs expanded its services and played a pivotal role in major financial markets, pioneering innovations such as using price-to-earnings ratios for company valuation instead of the conventionally used book value. Today, the firm ranks among the world’s largest investment banks, offering a diverse suite of financial services, including investment banking, securities underwriting, asset management, and wealth advisory. Recognized as a prominent financial institution, Goldman Sachs maintains a strong global presence, ranking 55th on the Fortune 500 list and 23rd on the Forbes Global 2000 list in 2024.
The Goldman Sachs Group, Inc. (NYSE:GS) operates through three primary divisions: Global Banking and Markets, Asset and Wealth Management, and Platform Solutions. Its revenue streams include advisory fees from mergers and acquisitions, underwriting services, proprietary trading, prime brokerage, and private equity investments. Goldman Sachs also generates earnings from its direct banking arm, Goldman Sachs Bank USA, and various hedge funds. By structuring complex financial products, facilitating initial public offerings, and making strategic investments, The Goldman Sachs Group, Inc. (NYSE:GS) sustains its competitive edge. With its long-standing reputation, extensive client base, and financial expertise, the company continues to be a dominant force in the global financial sector.
LMCG owns 51,377 shares of the company as of Q4 2024, with a total value of $29.42 million, representing 1.8% of Munder’s portfolio. Moreover, the fund increased its stake in Goldman Sachs Group, Inc. (NYSE:GS) by 6% during the fourth quarter of 2024, which suggests a positive hedge fund sentiment about the stock. Insider Monkey’s database indicated that 72 hedge funds out of the 900 hedge funds held stakes in the company as of the end of Q3 2024, with a total value of $5.64 billion, as opposed to 68 funds in Q2.
The Goldman Sachs Group, Inc. (NYSE:GS) announced on January 13 that it would be strengthening its position in private credit and private equity by launching the Capital Solutions Group, integrating financing, structuring, and risk management services within Global Banking & Markets. Additionally, the firm is expanding its alternative investment team in Asset & Wealth Management to enhance investment sourcing and strategy. With a history of leading major equity offerings and debt financings, the company continues to enhance its service offerings to meet the growing demand for alternative investments. This strategic expansion reinforces Goldman Sachs as one of the top stocks to buy, driven by innovation, strong market positioning, and a proven ability to adapt to evolving financial trends.
Ariel Appreciation Fund stated the following regarding The Goldman Sachs Group, Inc. (NYSE:GS) in its Q4 2024 investor letter:
“Several stocks in the portfolio delivered solid returns in the quarter. Global investment bank, The Goldman Sachs Group, Inc. (NYSE:GS) outperformed on a robust quarterly earnings beat, highlighted by strength across its investment banking, trading and asset management segments. Meanwhile, the U.S. election has been widely viewed as a positive catalyst across the industry. Investors expect the incoming administration to 1 The “Magnificent Seven” are the largest stocks in the S&P 500 Index driving market performance: Apple Inc. (AAPL), Amazon.com, Inc. (AMZN), Alphabet Inc. (GOOGL), Meta Platforms Inc. (META), Microsoft Corp. (MSFT), NVIDIA Corp. (NVDA) and Tesla, Inc. (TSLA). 2 Hobson, Mellody and John W. Rogers Jr. “What the Stock market Taught Us This Year: Don’t Fall for These Investing Traps.” Wall Street Journal, 5 December 2023. emphasize deregulation and exhibit a greater openness to business combinations compared to the prior regime. Hence, management’s positive commentary around the operating momentum of its core franchises, an improving M&A outlook and the resilience of the U.S. economy sent shares higher.”
8. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders as of Q3: 70
LMCG’s Equity Stake: $29.72 Million
AbbVie Inc. (NYSE:ABBV) is a leading pharmaceutical company based in North Chicago, Illinois, recognized as one of the largest biomedical firms by revenue. The company’s flagship product, Humira, is widely used to treat autoimmune disorders such as rheumatoid arthritis, Crohn’s disease, plaque psoriasis, and ulcerative colitis.
AbbVie Inc. (NYSE:ABBV) was established as an independent entity following Abbott Laboratories’ decision in 2011 to separate its pharmaceutical division into a standalone company. The spin-off was completed on January 1, 2013, and AbbVie began trading on the New York Stock Exchange under the ticker ABBV the following day. With a workforce of over 50,000 employees in more than 70 countries, AbbVie’s products address 75 medical conditions and are distributed in more than 175 countries. The company also collaborates with over 250 biotechnology firms, universities, nonprofits, and government organizations to drive medical innovation.
AbbVie Inc. (NYSE:ABBV) demonstrated strong financial performance for the quarter ended December 2024. The reported net revenue of $15.1 billion for the quarter, demonstrating a 5.6% increase year-over-year indicates solid business growth. However, the earnings per share (EPS) for the quarter were $2.16 against $2.79 for the same quarter in 2023, missing analyst estimates of $2.26 by 4.3%.
AbbVie’s top-selling drug, Humira, generated $187 billion in revenue for over two decades, but its patent expiration in January 2023 led to a 32% decline in Humira sales and a 7% drop in total company revenue due to similar medicines emerging in the market. Despite this, CEO Rob Michael stated at the 2025 JP Morgan Healthcare Conference that only 20% of patients have switched to the alternatives, with many transitioning to AbbVie’s newer immunology drugs, Skyrizi and Rinvoq. These treatments have already gained significant traction, capturing 50% of the market for inflammatory bowel disease (IBD) indications. With Skyrizi and Rinvoq contributing approximately $5 billion in growth, AbbVie Inc. (NYSE:ABBV)’s strategic shift towards innovative immunology treatments allows for the company’s strong long-term performance despite Humira’s decline.
LMCG owned 167,256 shares of the company as of Q4 2024, with a total value of $29.72 million, making it the stock with the 8th largest stake in Munder’s highly diversified portfolio. By the end of the third quarter, 68 funds out of the 900 funds tracked by Insider Monkey held stakes in AbbVie Inc. (NYSE:ABBV) worth over $2.58 billion, up from 67 funds by the end of Q2.
Polaris Global Equity Strategy stated the following regarding AbbVie Inc. (NYSE:ABBV) in its Q3 2024 investor letter:
“U.S. biopharma/biotech companies topped the health care sector, with the majority of holdings posting returns in excess of 10%. AbbVie Inc. (NYSE:ABBV) showed positive top-line growth from its immunosuppressive drugs, Skyrizi and Rinvoq. Abbvie’s management continues to work through the loss of exclusivity from Humira, switching patients to Skyrizi or Rinvoq rather than Humira biosimilars.”
7. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders as of Q3: 193
LMCG’s Equity Stake: $30.06 Million
NVIDIA Corporation (NASDAQ:NVDA) is a U.S.-based multinational technology company with its headquarters in Santa Clara, California, and is legally incorporated in Delaware. In November 2024, the company reported strong sales figures for the third quarter that ended on October 27, 2024, of $35.1 billion, up nearly 94% from a year ago. Similarly, earnings per share were announced at $0.81, increasing by a solid 103% from the same quarter in 2023. NVIDIA announced its next quarterly cash dividend payout of $0.01 per share on December 27, 2024.
These figures were driven by the global shift to AI and subsequently to NVIDIA computing. Jensen Huang, the founder and CEO of NVIDIA Corporation (NASDAQ:NVDA), emphasized that “AI is transforming every industry, company, and country,” highlighting how businesses are leveraging agentic AI to reshape workflows. He noted that advancements in physical AI are driving significant investments in industrial robotics and that even national governments around the world are increasingly recognizing the importance of developing their own AI capabilities and infrastructure.
Argus Research has reiterated its BUY rating for Nvidia Corporation (NASDAQ:NVDA), setting a 12-month price target of $175. Although Nvidia competes with major semiconductor and AI hardware companies such as AMD and Qualcomm, which focus on gaming and expanding into AI respectively, its advanced technology and broad product portfolio provide a strong competitive edge. For the quarter ending in January 2025, the company anticipates revenue between $36.8 billion and $38.3 billion, reflecting a 70% year-over-year increase. Despite heavy competition from DeepSeek, analysts remain confident, with no downward revisions in earnings projections.
At the end of September 2024, 193 hedge funds tracked by Insider Monkey held stakes in Nvidia Corporation (NASDAQ:NVDA), showing massive improvement from 179 hedge funds in the previous quarter. These stakes hold a consolidated value of roughly $49.06 billion.
Alger Spectra Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading supplier of graphics processing units (GPUs) for a variety of end markets, such as gaming, PCs, data centers, virtual reality, and high-performance computing. The company is leading in most secular growth categories in computing, and especially artificial intelligence and super-computing parallel processing techniques for solving complex computational problems. In our view, Nvidia’s computational power is a critical enabler of AI and therefore essential to AI adoption. Shares contributed to performance during the quarter, driven by strong demand for its data center products, especially the Hopper H200 chips, which generated double-digit billions in revenue, marking the fastest product ramp in the company’s history. Management provided fiscal fourth-quarter revenue guidance above analyst estimates, along with resilient operating margins supported by robust demand and limited competition. In our view, Nvidia’s leadership in scaling AI infrastructure, including advancements in inference and test-time scaling (i.e., reasoning during inference), is driving adoption among enterprises and startups, providing continued demand for its high-performance chips and software solutions. As older-generation chips are repurposed for inference and new clusters are deployed, we believe Nvidia is well-positioned to capitalize on growing compute needs across AI applications.”
6. Berkshire Hathaway Inc. (NYSE:BRK-A)
Number of Hedge Fund Holders as of Q3: 120
LMCG’s Equity Stake: $30.18 Million
A multinational holding company, Berkshire Hathaway Inc. (NYSE:BRK-A) ranks sixth among our top 10 stocks to buy according to Lee Munder Capital Group. Based in Omaha, Nebraska, the company owns many businesses in the United States and around the world in industries such as insurance, utilities, energy, transportation, manufacturing, and retail.
Founded in 1839 as a textile manufacturer, Berkshire Hathaway Inc. (NYSE:BRK-A) transitioned into a diversified conglomerate in 1965 under the leadership of Warren Buffett and Charlie Munger. Their strategic acquisitions and investment philosophy have shaped the company into a financial powerhouse. Berkshire Hathaway operates in various sectors, including insurance, railroad freight, utilities, energy, and media. Moreover, Berkshire Hathaway manufactures industrial products, including components for aerospace and power generation applications. It also produces consumer goods such as alkaline batteries and jewelry, as well as building materials like roofing, engineered products, bricks, and masonry. The company is involved in transportation, moving a variety of commodities and products, and operates in distribution, supplying electronic components. Additionally, Berkshire Hathaway Inc. (NYSE:BRK-A) provides aviation pilot training and conducts business across North America, Western Europe, and the Asia Pacific region.
Berkshire Hathaway’s diversified business model, strong leadership, and proven track record make it a compelling investment. The company consistently generates stable cash flows, maintains a fortress-like balance sheet, and owns a high-quality investment portfolio. With interests in recession-resistant industries like insurance and utilities, Berkshire Hathaway Inc. (NYSE:BRK-A) is well-positioned for long-term growth. Investors looking for stability and value-driven management may find Berkshire Hathaway an excellent addition to their portfolios.
5. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders as of Q3: 105
LMCG’s Equity Stake: $43.74 Million
An American multinational financial services firm headquartered in New York City and incorporated in Delaware, JPMorgan Chase & Co. (NYSE:JPM) is the largest bank in the United States. With an experience of 225 years, the company serves millions of customers, clients, and communities in over 100 global markets. The company is a market leader in investment banking, commercial banking, financial transaction processing, and asset management.
In the fourth quarter of 2024, JPMorgan Chase & Co. (NYSE:JPM) reported strong earnings; the company generated $42.77 billion in revenue, marking a 10% increase compared to the same period last year. The net income was reported as $14.01 billion, up 50% from the fourth quarter of 2023.
JPMorgan Chase & Co. (NYSE:JPM) operates through four key business segments. Consumer & Community Banking provides a range of services to individuals and businesses, including deposit and investment products, cash management, payment solutions, mortgage origination and servicing, credit card issuance, and auto loans. The segment generated a net income of $4.5 billion for Q4 2024, reflecting a 6% decline compared to the previous year. Commercial & Investment Banking offers investment banking, market-making, prime brokerage, and treasury and securities products to corporations, investors, financial institutions, and governments. It saw a strong performance with net income rising 59% year-on-year, reaching $6.6 billion for Q4 2024.
Carillon Eagle Growth & Income Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM) in its first quarter 2024 investor letter:
“JPMorgan Chase & Co. (NYSE:JPM) contributed positively to performance following solid financial results and positive guidance for the remainder of 2024. Moreover, growing chatter around rising capital markets activity likely contributed to the stock’s strong performance relative to other banks. Recall that JPMorgan has a robust capital markets franchise.”
The company was the fifth largest holding in Lee Munder’s stock portfolio. LMCG owned 182,481 shares of the company as of Q4 2024 which constitutes 2.68% of the hedge fund’s holding.
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders as of Q3: 202
LMCG’s Equity Stake: $48.80 Million
One of the prominent stocks Munder holds in the technology sector, Alphabet Inc. (NASDAQ:GOOGL) is headquartered in Mountain View, California. It is a multinational technology conglomerate and the third-largest technology company in the world by revenue, following Amazon and Apple. Established in 2015 through a restructuring of Google, Alphabet became the parent company of Google and several other former Google subsidiaries. Alphabet is part of the Big Five American tech companies.
Alphabet Inc. (NASDAQ:GOOGL) generates revenue from its search engine, artificial intelligence developments, mobile operating systems, cloud computing services, and advertising. For Q3 2024, the company reported a revenue of $88.27 billion, representing an 11% increase compared to the same period last year and surpassing analysts’ expectations of $86.39 billion. The company’s net income for the quarter reached $26.3 billion, marking a year-over-year growth of 33.6%. Operating income stood at $28.5 billion, an improvement from $21.3 billion in Q3 2023. Alphabet exceeded the consensus estimate for earnings per share (EPS) by $0.29, reporting an EPS of $2.12 for the quarter, compared to $1.55 in the same period of the previous year.
The company’s Q3 2024 financial performance appears strong, as Alphabet Inc. (NASDAQ:GOOGL) exceeded both revenue and earnings expectations. The 11% year-over-year increase in revenue and 33.6% rise in net income demonstrated solid growth and operational efficiency. The operating income boost from $21.3 billion to $28.5 billion, alongside a $0.29 earnings per share (EPS) beat, reflects enhanced profitability and solid market performance. This is positive news for investors and indicates that Alphabet is successfully expanding its business and maintaining competitive advantages, especially given the ongoing challenges in the tech sector.
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
3. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders as of Q3: 286
LMCG’s Equity Stake: $69.31 Million
Amazon.com, Inc. (NASDAQ:AMZN) is a multinational technology company specializing in e-commerce, cloud computing, digital streaming, online advertising, and artificial intelligence. Founded by Jeff Bezos in 1994 in Bellevue, Washington, it initially operated as an online bookstore before evolving into a massive online marketplace known as “The Everything Store”. Today, Amazon is one of the Big Five American technology giants. The company has diversified its business through numerous subsidiaries, including Amazon Web Services (AWS) for cloud computing, Zoox for self-driving vehicles, Kuiper Systems for satellite internet, and Amazon Lab126 for hardware development. Additionally, it owns Ring, Twitch, IMDb, and Whole Foods Market, expanding its presence in various industries.
Amazon.com, Inc. (NASDAQ:AMZN) has proven its strength as a top-performing stock with impressive financial results in Q3 2024. The company reported $158.88 billion in revenue, reflecting a strong 11% year-over-year growth and slightly surpassing consensus estimates by 0.3%. Additionally, its EPS of $1.86 outperformed expectations by 25.3%, showcasing its ability to deliver consistent profitability. With robust financial performance and a strong market presence, Amazon.com, Inc. (NASDAQ:AMZN) is an excellent choice for investors looking for both stability and growth in the technology industry.
Amazon.com, Inc. (NASDAQ:AMZN) plans to invest over $100 billion in capital expenditures this year, focusing heavily on artificial intelligence infrastructure. CEO Andy Jassy stated during the company’s earnings call that the $26.3 billion spent on capital expenditures in the fourth quarter was “reasonably representative” of the rate he expects to spend in 2025, with most of these funds allocated to AI advancements within Amazon Web Services (AWS). This is in line with its competitors’ strategies to invest in AI, with Alphabet, Microsoft, and Meta planning to spend $75 billion, $80 billion, and between $60 billion and $65 billion in capital expenditures for AI expansion respectively during the 2025 fiscal year. The company recently introduced Trainium2, its latest in-house AI chip, and is collaborating with AI startup Anthropic to build a powerful server using hundreds of thousands of these chips. Additionally, Amazon anticipates unveiling Trainium3 later this year, further enhancing its AI capabilities.
LMCG owned 315,920 shares of the company as of Q4 2024, with a total value of $69.31 million. The fund decreased its stake in Amazon.com, Inc. (NASDAQ:AMZN) by 4% during the fourth quarter of 2024. Overall, by the end of the September quarter, 286 hedge funds out of the 900 funds tracked by Insider Monkey held stakes in AMZN worth over $53.14 billion, down from 308 funds by the end of Q2.
Alger Spectra Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a renowned online retailer and leader in cloud computing. The company’s Amazon Web Services (AWS) division offers utility-scale cloud solutions that support corporate America’s digital transition. During the quarter, Amazon’s shares contributed to performance as the company reported better-than-expected fiscal third-quarter results, with revenues and earnings beating analyst estimates. Operating margins expanded to 11%, driven by efficiency gains in logistics and robust AWS performance. Notably, AWS revenue growth accelerated during the quarter, along with recording its highest-ever operating margin of 38.1%, driven by easing cloud cost optimizations, renewed workload migrations, and an increasing contribution from AI workloads. On their earnings call, management highlighted plans to increase capital expenditures to enhance their technology infrastructure, catering to the surging demand for AI-driven computing.”
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders as of Q3: 158
LMCG’s Equity Stake: $71.46 Million
Apple Inc. (NASDAQ:AAPL), based in Cupertino, California, is a global technology leader recognized for its consumer electronics, software, and services. Originally founded in 1976 as Apple Computer Company by Steve Jobs, Steve Wozniak, and Ronald Wayne, the company rebranded to Apple Inc. in 2007 to reflect its expansion beyond computers.
Apple’s product ecosystem includes hardware such as the iPhone, iPad, Apple Watch, Mac, and Apple TV, alongside operating systems like iOS, iPadOS, and macOS. Its software and services portfolio features Apple Pay, iCloud, Apple Music, and Apple TV+. As one of the Big Five U.S. tech giants, Apple has consistently led in market capitalization since 2011. Apple Inc. (NASDAQ:AAPL) is the largest mobile phone and tablet vendor globally, the fourth-largest personal computer manufacturer, and a dominant force in the industry.
As of Q4 2024, the company reportedly faced challenges in China, where iPhone sales declined by 11.1%, bringing revenue in the region down to $18.51 billion – its largest drop since Q1 2024. Apple continues to struggle in the world’s largest smartphone market due to intensified competition from domestic brands like Oppo, Vivo, and Huawei. CEO Tim Cook attributed part of the sales decline to the unavailability of Apple Intelligence, the company’s generative AI feature, in China and other key markets.
Despite these challenges, Apple Inc. (NASDAQ:AAPL) posted revenues of $124.3 billion for the quarter ended December 2024, which was 3.95% up from the revenue of $119.58 billion in the same quarter of the previous year. The revenue crossed the consensus estimates of $124.03 billion for the quarter by a slight 0.22%. Apple reported quarterly earnings of $2.40 per share in Q4, $0.22 more than the EPS for the quarter a year ago. On January 30, 2025, the company announced that its board of directors had declared a quarterly cash dividend of $0.25 per share for the company’s common stock payable on February 13, 2025, to holders of record at the close of business on February 10, 2025.
Tsai Capital stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“We initiated our investment in Apple Inc. (NASDAQ:AAPL) in 2016 and elevated it to a core holding in 2018, the same year the company introduced its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s visionary leadership, Apple has consistently redefined innovation in hardware and software.
The September 2024 launch of the iPhone 16, with its groundbreaking AI capabilities, including enhanced image generation tools, marks another inflection point. We believe this transformative device is the foundation for an AI-driven supercycle and could entice approximately 100 million consumers to upgrade, reinforcing Apple’s leadership in the industry.
Today, Apple’s ecosystem spans over two billion active devices, supported by a rapidly-growing base of subscription services. This strategy has helped to turbocharge customer engagement and spending. In the most recent fiscal year, which ended in September 2024, Apple’s high-margin services division accounted for 39.3% of total gross profits, up from 32.8% just two years ago.
Apple’s financial footing remains exceptional, with approximately $50 billion in net cash and marketable securities. Looking ahead, we expect earnings-per-share growth to outpace revenue growth, driven by margin expansion and continued share buybacks.”
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders as of Q3: 279
LMCG’s Equity Stake: $82.11 Million
Headquartered in Redmond, Washington, Microsoft Corporation (NASDAQ:MSFT) is a leading multinational technology conglomerate known for its contributions to personal computing, cloud services, artificial intelligence, and gaming. Founded in 1975 by Bill Gates and Paul Allen, Microsoft was officially incorporated on June 25, 1981. The company initially gained popularity with MS-DOS in the 1980s and later dominated the personal computing market with its Windows operating system. Microsoft went public in March of 1986, leading to significant financial success. Over the years, the company expanded beyond software into various industries, such as gaming with the launch of the Xbox console in 2001. It also strengthened its communication domain by acquiring Skype in 2011, a platform that revolutionized online voice and video calling.
In recent years, Microsoft Corporation (NASDAQ:MSFT) has heavily invested in artificial intelligence and cloud computing. In January of 2023, the company extended its partnership with OpenAI, reinforcing its leadership in AI-powered innovation. This was followed by the introduction of Microsoft 365 Copilot in March of 2023, integrating next-generation AI into its productivity suite. Soon after, Windows Copilot was launched on May 23, 2023, enhancing AI-driven user experiences. On September 21, 2023, Microsoft announced Microsoft Copilot as an everyday AI assistant, further embedding AI across its products. Continuing this trend, on October 1, 2024, the company introduced Copilot Labs and Copilot Vision, reinforcing its commitment to AI-driven advancements. These developments solidify Microsoft’s position at the forefront of technological innovation and artificial intelligence, ensuring its relevance in an evolving digital landscape.
Microsoft Corporation (NASDAQ:MSFT) was the largest holding in Lee Munder’s stock portfolio. LMCG owns over 194,808 shares of the company as of Q4 2024 worth over $82.11 million, which constitutes 5.03% of the hedge fund’s holding. Of the 900 hedge funds tracked by Insider Monkey, 279 funds had stakes in the company as of the third quarter of 2024, amounting to $91.01 billion.
For Q4 2024, Microsoft Corporation (NASDAQ:MSFT) announced a revenue of $69.63 billion with a year-over-year growth of 12%. Its operating income of $31.65 billion increased 17% as compared to the same quarter in 2023. Moreover, the company’s EPS for Q4 2024 was announced as $3.23, which was $0.11 more than the estimated EPS of $3.12.
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.”
Overall, Microsoft Corporation (NASDAQ:MSFT) ranks first on our list of top 10 stocks to buy according to Lee Munder Capital Group. While we acknowledge the potential for MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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