Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” first-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned 14.06% net in the first quarter compared to a 14.37% return for the Russell 1000 Growth Index and a 7.50% return for the S&P 500 Index. The first quarter was different from 2022. Technology, communications services, and consumer discretionary sectors were strong, while financials, energy, healthcare, and utilities sectors all had negative returns, which was opposite to the sectors’ performance last year. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Polen Focus Growth Strategy highlighted stocks like Alphabet Inc. (NASDAQ:GOOG) in the first quarter 2023 investor letter. Headquartered in Mountain View, California, Alphabet Inc. (NASDAQ:GOOG) is a multinational technology company. On April 25, 2023, Alphabet Inc. (NASDAQ:GOOG) stock closed at $104.61 per share. One-month return of Alphabet Inc. (NASDAQ:GOOG) was 2.66%, and its shares lost 9.05% of their value over the last 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of $1.344 trillion.
Polen Focus Growth Strategy made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q1 2023 investor letter:
“One area we are watching regarding Alphabet Inc. (NASDAQ:GOOG) and Adobe is AI systems and their capabilities, including generative AI. Interestingly, both Adobe and Alphabet could see benefits or threats from the emergence of generative AI and large language models (LLMs). Both companies already use generative AI to the benefit of their users in anticipating how content creators edit their work (Adobe) and in how search results are anticipated and generated (Google). At the same time, breakthrough technologies like AI can open the door to additional competition and/or impact a company’s profitability levels. We now see AI systems others are developing, including LLMs and generative AI offerings, that could be more competitive in the future. While we think it remains early days for ChatGPT and the capabilities of these types of LLMs and generative AI programs like DALL-E, the technology seems to be progressing at a fast rate and will at least require a strong response from incumbents.
As of now, we believe Alphabet and Adobe are leaders in their own right in these areas and have a clear path to improving their existing offerings with AI advancements, which would allow them to be net beneficiaries of AI. There are also significant barriers to building leading AI offerings in these areas. As a result, our position sizes in Adobe and Alphabet remain sizeable. For Adobe, the status of its pending $20 billion-plus Figma acquisition is also uncertain. There is a good chance, in our view, that it will be blocked by regulators, which would mean the future opportunity to expand its offerings to the developer community (beyond designers) may not occur.”
Pixabay/Public Domain
Alphabet Inc. (NASDAQ:GOOG) is in 6th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 152 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the fourth quarter which was 156 in the previous quarter.
We discussed Alphabet Inc. (NASDAQ:GOOG) in another article and shared the list of largest cloud providers by revenue. In addition, please check out our hedge fund investor letters Q1 2023 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.
