Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. On September 18th, the U.S. Federal Reserve ("Fed") reduced interest rates by 0.5%, bringing much-needed relief to investors. This crucial action contributed to stabilizing the markets following a volatile August. During the quarter, small-cap stocks outperformed large-cap stocks, achieving gains of 9.3% and 6.1%, respectively, according to the Russell family of indices. In the quarter, the fund returned 6.78% (net) outperforming the benchmark, the Russell 2500 Growth Index’s 6.99% return. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Meridian Growth Fund highlighted stocks like GLOBALFOUNDRIES Inc. (NASDAQ:GFS), in the third quarter 2024 investor letter. GLOBALFOUNDRIES Inc. (NASDAQ:GFS) is a semiconductor foundry, that provides mainstream wafer fabrication services and technologies. The one-month return of GLOBALFOUNDRIES Inc. (NASDAQ:GFS) was 12.41%, and its shares lost 22.02% of their value over the last 52 weeks. On November 27, 2024, GLOBALFOUNDRIES Inc. (NASDAQ:GFS) stock closed at $42.85 per share with a market capitalization of $23.681 billion.

Meridian Growth Fund stated the following regarding GLOBALFOUNDRIES Inc. (NASDAQ:GFS) in its Q3 2024 investor letter:

"GLOBALFOUNDRIES Inc. (NASDAQ:GFS) is a semiconductor contract manufacturing and design company. The strategically valuable company operates facilities in the U.S., Singapore, and Europe, reducing exposure to geopolitical risks in China and Taiwan. The stock’s underperformance in the period aligned with broader weakness in the semiconductor industry while facing softening demand from end markets. As the sector recovers from a downturn, the company’s revenue sources are shifting toward lower-margin, but much healthier revenue sources. This dynamic will make for tough comparisons in the near term but overall, allows the company to drive higher revenues through product sales instead of collecting capacity underutilization fees. During the period, we slightly trimmed our position in the company."

A technician holding a complex printed circuit board with microcontrollers, showing the company's expertise in powering devices.

GLOBALFOUNDRIES Inc. (NASDAQ:GFS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held GLOBALFOUNDRIES Inc. (NASDAQ:GFS) at the end of the third quarter which was 21 in the previous quarter. While we acknowledge the potential of GLOBALFOUNDRIES Inc. (NASDAQ:GFS) 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.