In this article, we will take a detailed look at the Top 10 Stocks to Buy According to XN Exponent Advisors LLC.
Established in 2018 by Gaurav Kapadia, XN Exponent Advisors LLC is based in New York and manages approximately $2.53 billion in 13F securities according to its latest filing for the fourth quarter of 2024. With just 13 clients, the hedge fund maintains a concentrated portfolio, with its top ten holdings accounting for 69.02% of its total assets. XN employs a global investment strategy that spans both public and private markets, focusing on generating high risk-adjusted returns. The firm targets sectors where it has deep expertise while deliberately avoiding balance sheet-heavy industries such as financials, healthcare, energy, and materials.
The firm primarily invests in North America and Western Europe but remains open to opportunities in other regions that align with its strategic goals. XN’s investment approach is built around a long/short strategy, where it seeks to capitalize on market inefficiencies by purchasing undervalued assets and shorting overvalued ones. This method hinges on the firm’s ability to assess market opportunities accurately, though there is no guarantee of success. Market disruptions pose a significant risk, as they can result in substantial losses and may force XN to close out client positions to mitigate damage.
A key feature of XN’s approach is its flexibility. Unlike traditional investment firms bound by rigid diversification or leverage policies, XN can trade across a wide range of securities, issuers, countries, and sectors to align with its investment objectives. This adaptability enables the firm to respond quickly to shifting market conditions, reallocating client assets as necessary. While this strategy offers significant potential for high returns, it also carries inherent risks, particularly in volatile market environments. However, XN’s focus on specialized knowledge and strategic positioning aims to maximize opportunities while managing downside exposure.
Founder and Chief Executive Officer of XN, Gaurav Kapadia has nearly two decades of experience in public and private markets and has built a reputation as a visionary investor and business leader. Before launching XN, a firm whose name reflects the power of long-term compounding, Kapadia was the Co-Founder and Co-Managing Partner of Soroban Capital Partners, a globally recognized investment firm. Prior to that, he served as a Partner at TPG-Axon Capital, working in both New York and London. His extensive expertise in finance and investing is rooted in his academic background; he earned a Bachelor of Science in Economics from the Wharton School at the University of Pennsylvania in 1999.
Beyond his financial career, Kapadia is deeply committed to philanthropy and civic engagement, particularly in the arts, humanities, education, and social equity. In September 2023, the Mellon Foundation announced his election to its Board of Trustees, recognizing his dedication to supporting cultural and educational initiatives. He has been a strong proponent of the transformative power of art and the humanities, emphasizing their role in fostering positive societal change. Under the leadership of Mellon Foundation President Elizabeth Alexander, Kapadia expressed his excitement to contribute to the organization’s mission, citing its precision and ambitious vision as key reasons for his involvement.
Kapadia also serves on the Boards of Trustees for several influential institutions, including The Whitney Museum of American Art, The Trust for Governors Island, Uncommon Schools, and The Institute for Constitutional Advocacy and Protection at Georgetown University Law Center. His advocacy for education, civic engagement, and equality underscores his commitment to creating meaningful opportunities for underserved communities. Through his leadership in both finance and philanthropy, Kapadia continues to bridge the worlds of business and social impact, demonstrating how strategic investments—whether in financial markets or cultural institutions—can drive long-term positive change.
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Our Methodology
The stocks discussed below were picked from XN Exponent Advisors LLC’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Top 10 Stocks to Buy According to XN Exponent Advisors LLC
10. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders as of Q4: 174
XN Exponent Advisors LLC’s Equity Stake: $100.22 Million
Alphabet Inc. (NASDAQ:GOOG) continues to demonstrate strong financial performance, exceeding market expectations in its latest earnings report. The company reported fourth-quarter earnings of $2.15 per share on revenue of $96.47 billion, surpassing analyst projections and marking significant growth from the previous year’s $1.64 per share on $86.3 billion in revenue. Looking ahead, analysts forecast earnings of $2.04 per share for the upcoming quarter, reflecting a 7.94% year-over-year increase, with revenue expected to grow by 11.94% to $75.67 billion. For the full fiscal year, Alphabet’s earnings are projected to rise by 10.57% to $8.89 per share, while revenue is anticipated to climb 13.36% to $334.55 billion.
Alphabet Inc. (NASDAQ:GOOG)’s innovation-driven ventures remain a key part of its growth strategy. One such example is Taara, a light-based internet project that has spun off from Alphabet’s X moonshot division into an independent company. Taara’s laser technology, which offers a high-bandwidth alternative to fiber optics in hard-to-reach locations, is positioning itself as a competitor to Elon Musk’s Starlink. With operations in 12 countries and backing from Series X Capital, the company retains a minority stake in Taara as it moves toward commercialization. This spin-off follows the path of previous projects like Loon, which sought to distribute data via high-altitude balloons but was ultimately discontinued.
Despite its success in innovation and financial performance, Alphabet Inc. (NASDAQ:GOOG) faces mounting regulatory scrutiny. Some of its past acquisitions, such as DoubleClick, have become integral to its business but have also drawn antitrust concerns. The U.S. Justice Department has taken legal action against Alphabet Inc. (NASDAQ:GOOG) over allegations of monopolistic behavior in both its search engine and digital advertising practices. A potential ruling this year could lead to major structural changes, including the forced divestiture of Chrome and restrictions on default search engine agreements with companies like Apple. Meanwhile, Google’s recent acquisition of cybersecurity firm Wiz is expected to undergo rigorous regulatory review, as the Trump administration signals a tougher stance on Big Tech dominance.
9. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders as of Q4: 317
XN Exponent Advisors LLC’s Equity Stake: $111.83 Million
Microsoft Corporation (NASDAQ:MSFT) continues to strengthen its position in cloud computing and artificial intelligence, reporting impressive Q4 financial results with a 12.27% year-over-year revenue increase to $69.63 billion and earnings per share (EPS) of $3.23, surpassing market expectations. However, despite its strong financial performance, the company faces growing regulatory scrutiny, particularly regarding its investment in OpenAI and cloud licensing practices. U.S. regulators are assessing whether these strategies promote innovation or hinder competition, a review that could shape Microsoft’s long-term growth trajectory and legal outlook.
As Microsoft Corporation (NASDAQ:MSFT) deepens its AI ambitions, CEO Satya Nadella announced a leadership shift, appointing Amy Coleman as the new chief people officer while longtime executive Kathleen Hogan transitions to the newly created Office of Strategy and Transformation. Hogan, who played a key role in Microsoft’s cultural evolution over the past decade, will now focus on adapting the company’s workforce strategy to an era increasingly defined by AI-driven transformation. The leadership change aligns with Microsoft’s reassessment of its performance review system, following recent job cuts affecting nearly 2,000 employees.
Coleman, a 25-year Microsoft veteran, will oversee efforts to align talent management with the company’s AI-focused future, ensuring that Microsoft’s workforce remains agile and innovative. Nadella emphasized the need for continuous adaptation in “times of great change,” as AI reshapes industries and redefines how businesses operate. With Microsoft Corporation’s (NASDAQ:MSFT) scrutiny intensifying and competition in AI and cloud computing growing fiercer, the company is positioning itself to navigate both opportunities and challenges in the rapidly evolving tech landscape.
Microsoft Corporation (NASDAQ:MSFT) is a recent addition to Gaurav Kapadia’s portfolio, with the hedge fund acquiring shares for the first time in Q4 2024. Despite being a new holding, XN Exponent Advisors LLC invested significantly, purchasing 265,320 shares valued at over $111 million, making it the ninth most valuable position in the fund’s 13F portfolio for the quarter ending in December 2024.