Wedgewood Partners, an investment management company, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, Wedgewood Composite’s net return was 5.8% compared to the Standard & Poor’s 5.9%, the Russell 1000 Growth Index’s 3.2%, and the Russell 1000 Value Index’s 9.4% return for the same period. Year to date, the composite returned 22.4% compared to the 22.1%, 24.6%, and 16.7% returns for the indexes, respectively. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024.
Wedgewood Partners highlighted stocks like Alphabet Inc. (NASDAQ:GOOG) in its Q3 2024 investor letter. Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was -0.49%, and its shares gained 33.29% of their value over the last 52 weeks. On October 23, 2024, Alphabet Inc. (NASDAQ:GOOG) stock closed at $164.48 per share with a market capitalization of $2.013 trillion.
Wedgewood Partners stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q3 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) also detracted from performance despite reporting strong +15% revenue growth (foreign exchange-neutral) in its core search business during the Company’s second quarter. The Company continues to integrate generative AI (gen AI) applications into its largest products that reach billions of users every day. The advertisements that appear above and below this gen AI content, particularly on search results, represents a valuable opportunity for businesses. In addition, the Google subsidiary of Alphabet has been deploying gen AI features that help advertisers easily create ad content and then quickly scale that content across all of Google’s properties and formats. As we have pointed out in the past, Google’s new AI-driven advertising tools and products represent returns on the Company’s early and aggressive investments in AI hardware and application software over the past decade and should lead to significant, sustainable competitive advantages. During the quarter, the District of Columbia ruled that Google violated antitrust law by maintaining a monopoly in the U.S. across its search services and text advertising, specifically through exclusive distribution agreements. Alphabet’s deep competitive advantages go far beyond its distribution agreements, and we believe the Company should be able to maintain its superior return structure, despite the recent legal headwinds.”
A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 165 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the second quarter which was 165 in the previous quarter. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) 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 Alphabet Inc. (NASDAQ:GOOG) and shared the list of top trending AI stocks in Q4. Alphabet Inc. (NASDAQ:GOOG) detracted from the performance of Madison Investors Fund in Q3 2024. 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.