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Sands Capital, an investment management company, released its “Sands Capital Select Growth Fund” Q4 2024 investor letter. A copy of the same can be downloaded here. Select Growth primarily targets U.S. companies that are leading the way in crucial areas of positive structural transformation within the economy. The fund returned 8.8% (net) in the fourth quarter compared to 7.1% return for the benchmark, the Russell 1000 Growth Index. The fund returned 24.3% over the one year period compared to 33.4% return for the Index. You can check the fund’s top 5 holdings to know more about its best picks for 2024.
In its fourth quarter 2024 investor letter, Sands Capital Select Growth Fund emphasized stocks such as AppLovin Corporation (NASDAQ:APP). AppLovin Corporation (NASDAQ:APP) develops a software-based platform for advertisers to enhance the marketing and monetization of their content. The one-month return of AppLovin Corporation (NASDAQ:APP) was -19.03%, and its shares gained 280.05% of their value over the last 52 weeks. On March 31, 2025, AppLovin Corporation (NASDAQ:APP) stock closed at $264.97 per share with a market capitalization of $90.079 billion.
Sands Capital Select Growth Fund stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q4 2024 investor letter:
"AppLovin Corporation (NASDAQ:APP) is one of the leading providers of advertising solutions for mobile game developers. The business aggregates advertising inventory for mobile gaming, offering a suite of products to track advertising performance to optimize distribution and monetization. The company has a dominant position in mobile ad mediation, as well as a strong position on the demand side. Since the launch of Axon 2.0, its artificial intelligence-based advertising model, AppLovin has begun fine-tuning its large-language model for ecommerce, receiving strong early feedback from ecommerce advertisers. In our view, this provides an opportunity for the business to expand outside its core gaming vertical to ecommerce and aggregate demand from nongaming applications. While this opportunity is early, the unconstrained nature of performance advertising provides upside to both the magnitude and duration of growth that AppLovin could sustain if successful."
A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform.
AppLovin Corporation (NASDAQ:APP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 95 hedge fund portfolios held AppLovin Corporation (NASDAQ:APP) at the end of the fourth quarter compared to 51 in the third quarter. AppLovin Corporation (NASDAQ:APP) reported strong fourth quarter with total revenue increasing 44% year over year to $1.37 billion and adjusted EBITDA increasing 78% to $848 million, achieving a 62% adjusted EBITDA margin. While we acknowledge the potential of AppLovin Corporation (NASDAQ:APP) 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.