Investment management firm Fred Alger Management released the "Alger Mid Cap Focus Fund" for investors in the first quarter of 2025. A copy of the letter can be downloaded here. In the first quarter of 2025, U.S. stocks faced increased volatility due to shifts in fiscal, monetary and trade policies. The rise of China's advanced AI models matches the capabilities of the United States, which matches this uncertainty at a lower cost. As a result, investors reassessed high capital expenditures for U.S. tech companies, thus selling AI stocks and fearing domestic AI returns. Against this backdrop, the fund's Class A stocks performed poorly, with Russell MidCap growing this quarter. Also, check the fund’s top five holdings to see its best options for 2025.
Advertising: High-yield savings
In a first-quarter 2025 investor letter, Alger Mid Cap’s key fund highlighted stocks such as Appleovin Corporation (NASDAQ: APP). Appleovin Corporation (NASDAQ: APP) has developed a software-based platform for advertisers to enhance the marketing and monetization of their content. Appleovin Corporation (NASDAQ:APP) has a one-month return of 39.63%, and its stock has accounted for 373.04% of its value over the past 52 weeks. On May 28, 2025, Appleovin Corporation (NASDAQ: APP) closed at $390.26 per share, with a market value of $13.259 billion.
Alger Mid Cap Focus Fund pointed out the following about Appleovin Corporation (NASDAQ: APP) in its Q1 2025 investor letter:
“Applovin Corporation (NASDAQ:APP) is an advertising technology company that provides a digital platform that helps the market, monetize and analyzes its apps. We believe the company is experiencing positive lifecycle changes powered by its AI-powered software engine. While currently focusing on mobile gaming, Appleovin is expanding into other market segments. Its demand-side platform (DSP) supports ad location, user acquisition, inventory matching and performance analysis. Furthermore, we believe that AI is at the heart of Appleovin's growth, driving most of the company's revenue through its recommendations and target engines. We believe Appleovin gains a competitive advantage by leveraging its gaming portfolio and the data from its developer partners to provide installation of high-value applications. We believe that this scale and data advantage can enhance its network effects, improve its technology and increase market share in mobile games. When developers use the platform, the company gathers data that constantly refines its algorithms, creates more value and attracts more developers into the ecosystem. Stocks weakened performance after a brief (1) sales company report questioned Applovin's business practices this quarter. In response, the company defended its business and hired an independent law firm to investigate the claim. Despite these challenges, we believe Appleovin's focus on AI and machine learning continues to enhance its advertising capabilities, and in our view, the company continues to grow in the mobile application ecosystem. ”
Close-up of mobile devices showing advertisers connecting with consumers through a software-based platform.
Appleovin Corporation (NASDAQ:APP) is not among 30 stocks of our 30 hedge funds. According to our database, at the end of the first quarter, the 96 hedge fund portfolio held Applovin Corporation (NASDAQ:APP) at the end of the previous quarter, which was 95 in the previous quarter. Appleovin Corporation (NASDAQ:APP) Q1 revenue surged 40% to $1.5 billion in 2025. While we acknowledge the potential of Appleovin Corporation (NASDAQ:APP) as an investment, our belief is that AI stocks have greater hope to deliver higher returns and conduct them in a shorter time frame. If you are looking for AI stocks that are as promising as NVIDIA, but whose earnings are trading at less than 5 times the price, check out our report on undervalued AI stocks.
In another article, we introduce Applovin Corporation (NASDAQ: APP) and share what the Sands Capital Technology Innovators Fund thinks about the company. The Carillon Eagle Mid Cap Growth Fund also analyzed Appleovin Corporation (NASDAQ: APP) in its 2025 investor letter in its Q1 and attributed its quarterly decline to the same factors. Also, check out our Hedge Fund Investor Letters Q1 2025 page for more investors in hedge funds and other leading investors.
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Disclosure: None. This article was originally published in Insider Monkey.