Fred Alger Management, an investment management company, released its “Alger Small Cap Growth Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. equities rose in the fourth quarter, driven by decisive U.S. presidential election outcome. Class A shares of the fund outperformed the Russell 2000 Growth Index in the quarter. The Information Technology and Health Care sectors positively influenced performance, while Consumer Discretionary and Financials negatively impacted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Alger Small Cap Growth Fund highlighted stocks like Astera Labs, Inc. (NASDAQ:ALAB) in its Q4 2024 investor letter. Astera Labs, Inc. (NASDAQ:ALAB) engages in the manufacturing of semiconductor-based connectivity solutions for cloud and AI infrastructure. The one-month return of Astera Labs, Inc. (NASDAQ:ALAB) was -37.21%, and YTD its shares lost 37.21% of their value. On January 27, 2024, Astera Labs, Inc. (NASDAQ:ALAB) stock closed at $83.16 per share with a market capitalization of $13.19 billion.
Alger Small Cap Growth Fund stated the following regarding Astera Labs, Inc. (NASDAQ:ALAB) in its Q4 2024 investor letter:
“Astera Labs, Inc. (NASDAQ:ALAB) is a semiconductor company specializing in connectivity solutions for data-centric systems, including cloud computing, artificial intelligence, and machine learning. Its products optimize data flow and performance in servers, GPUs, and AI accelerators, addressing bottlenecks in high-performance computing environments. The company’s Intelligent Connectivity Platform (ICP) integrates advanced semiconductor hardware with the proprietary COSMOS software suite, delivering customizable and cost-effective solutions. Astera’s Platform-Specific Standard Products (PSSP) enhance flexibility with features such as predictive analytics, monitoring, and troubleshooting. Backed by strong relationships with leading cloud and AI providers, we believe Astera is well positioned in rapidly growing markets, demonstrating high profitability and industry-leading gross margins. During the quarter, shares contributed to performance after reporting better-than-expected fiscal third-quarter results, with revenues and gross margins exceeding analyst estimates. Specifically, revenue growth spanned all four product segments, led by accelerated custom silicon sales and robust GPU demand. Management also raised fiscal fourth-quarter guidance, citing expanding product ramps and a broader customer base.”
An aerial view of an intricate network of digital infrastructure, lit up against a night sky.
Astera Labs, Inc. (NASDAQ:ALAB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Astera Labs, Inc. (NASDAQ:ALAB) at the end of the third quarter which was 19 in the previous quarter. Astera Labs, Inc. (NASDAQ:ALAB) achieved impressive results in the third quarter, marking fifth straight quarter of record revenue at $113 million. This figure represents a 47% increase from the previous quarter and a remarkable 206% increase from Q3 2023. While we acknowledge the potential of Astera Labs, Inc. (NASDAQ:ALAB) 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 Astera Labs, Inc. (NASDAQ:ALAB) and shared the list of stocks hurting from DeepSeek AI news that could turn into multibaggers. In addition, please check out our hedge fund investor letters Q3 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.