Light Street Capital Returned 46% in 2023: Top 15 Picks
In this piece, we will take a look at Light Street Capital returned 46% in 2023: top 15 picks. If you wish to skip our detailed overview of Kacher’s history, investment philosophy and hedge fund performance, go directly to Light Street Capital Returned 46% in 2023: Top 5 Picks.
Glen Kacher is the founder and chief investment officer at the hedge fund Light Street Capital. He attended University of Virginia where he graduated with B.S. Commerce at the McIntire School of Commerce. He obtained his MBA from Stanford University.
Kacher is among the famous figures in the hedge fund industry. The hedge fund boss, who chose to base his operations in Silicon Valley rather than Wall Street, learned investing from some of the industry’s greatest.
Prior to starting Light Street Capital in 2010, Kacher worked as managing director at the hedge fund Integral Capital Partners under industry titan Roger McNamee. During his time at Integral, which started in 1998, Kacher oversaw investments in the technology sector. His investment areas of focus included software, internet services and media.
Before he joined Integral, Kacher worked for the hedge fund Tiger Management under Julian Robertson – a pioneering figure in the hedge fund industry. Kacher went to work for the billionaire legendary hedge fund manager Robertson’s fund after he graduated college with a bachelor’s degree in commerce in 1993 and remained there until 1997.
At Tiger, Kacher initially worked as a full-time research analyst. At some point, Kacher transitioned to the role of a part-time investment consultant for the hedge fund. During his tenure at Tiger, he focused on investments in hardware, software and networking industries
Kacher came to launch Light Street Capital armed with a graduate business degree, years of experience in investing in the technology space and lessons from some of the industry’s best. Kacher’s Light Street Capital is one of the Tiger cubs – hedge funds whose founders had worked at Tiger Management.
Light Street Capital is a tech-focused hedge fund headquartered in Silicon Valley – the global epicenter of technology innovation. The firm has $680 million in assets under management. Light Street invests by applying long and short investment strategies.
Being based in Silicon Valley, Kacher has had a vantage view of the technology space, allowing him to better understand industry trends and spot opportunities ahead of others. In Silicon Valley, the Light Street Capital founder rubs shoulders with technology innovators, startup founders, venture capitalists and entrepreneurs.
"What I learned at business school was that Silicon Valley was the center of the creation of the internet industry… It seemed crazy to go back to New York." Kacher once told Forbes.
The Silicon Valley insights help guide Kacher’s long and short investment strategies. For example, he takes long positions in industry disruptors and shorts the incumbents. After learning that business travelers preferred ride-hailing services like Uber to traditional rental car services, Kacher went about shorting rental car stocks like Hertz Global Holdings Inc (NASDAQ:HTZ) and made good money out of it.
Also, Kacher shorts auto parts stocks because he believes that the rise of ride-sharing and electric cars will reduce consumer demand for auto parts.
As with all other hedge funds, Kacher’s Light Street Capital has had its hits and misses. There are years that it has delivered outstanding returns and years when it has suffered overwhelming losses.
From 2010 through 2017, Light Street’s annualized net returns stood at 19.8%. In 2017, the fund delivered returns of 38.6%. In 2018, its returns improved to 53% in the first 10 months of the year.
But 2021 and 2022 turned out to be punishing years for Kacher. His hedge fund lost 26% in 2021 and things only got worse in 2022 when the fund lost 54%. In 2022, soaring inflation, Russia’s war with Ukraine and rising interest rates combined to hurt technology companies. That dealt a heavy blow to tech-focused hedge funds such as Light Street Capital.
Glen Kacher of Light Street Capital
But the fund made a strong comeback in 2023, returning 46%. In 2023, tech stocks benefited from AI excitement, which led to the blockbuster returns at Light Street Capital.
The AI theme is expected to continue impacting tech stocks in 2024. In a recent interview with CNBC, Glen Kacher spoke about AI being a multi-decade opportunity.
While there will no doubt be ups and downs, the hedge fund boss noted that AI presents a huge tailwind and opportunity for investors. He sees the AI impact on technology companies being as massive as the previous major technology shifts, such as the shift from PCs to networks or SaaS software.
Kacher believes that AI presents a massive opportunity for the leaders in the technology sector and that AI is an incredible opportunity for investors to deploy their capital behind.
As to the best way for investors to get exposure to AI opportunities, Kacher believes that semiconductor stocks present a good opportunity. He notes that NVIDIA Corp (NASDAQ:NVDA), Advanced Micro Devices, Inc. (NASDAQ:AMD) and Broadcom Inc (NASDAQ:AVGO) are some of the chip companies that are well-positioned to benefit from AI.
Software companies are also great opportunities, according to Kacher. The hedge fund boss said that Magnificent Seven companies are best-positioned to ride the AI trend. He noted that these are companies with customers, massive data and massive amounts of capital.
AI is going to be a big deal for the tech industry in 2024. In Davos, industry experts spoke about 2024 being a potentially big year for AI. They noted that 2023 was the year of discovery when AI proved its ability and that 2024 will be the year when focus will be on improving the technology’s reliability so that those adopting it can be more comfortable with it.
Apart from AI continuing to attract more money to the technology stocks, the economic outlook also looks promising for tech companies. The Fed appears to have succeeded in cooling off inflation without triggering a recession. Moreover, the Fed is expected to start cutting interest rates in 2024. Technology companies tend to thrive in an environment of low interest rates as borrowing becomes cheap and obtaining capital becomes easy.
Amid the continuing AI excitement and growing optimism over economic outlook as inflation cools and the Fed contemplates rate cuts, stocks are soaring in 2024 with Nasdaq and the S&P 500 hitting all-time highs in January.
In its latest 13F filing, Light Street Capital revealed large stakes in semiconductor stocks that are expected to benefit from AI-fueled demand. The filing also shows that the fund remains heavily invested in software companies that develop AI tools or stand to benefit from integrating AI systems into their operations.
With these details in mind, let’s take a look at the top 15 stocks in Glen Kacher’s Light Street Capital portfolio.
Our Methodology
Light Street Capital bounced back in 2023 after the rout of technology companies in 2022 wiped out some 70% of the firm’s assets. The hedge fund benefited from its long positions in some extensive tech stocks that exploded amid the artificial intelligence frenzy. Consequently, we have analyzed the hedge fund 13F filings and settled on its top stock picks. The stocks are ranked in ascending order based on Glen Kacher’s hedge fund’s holdings. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Light Street Capital Returned 46% in 2023: Top Picks
15. Salesforce, Inc. (NYSE:CRM)
Light Street Capital’s Equity Stake: $11.27 Million
Number of Hedge fund Holders: 122
Salesforce, Inc. (NYSE:CRM) was one of the stocks behind Light Street Capital returning 46% in 2023. The enterprise software giant is best known for its customer relationship management technology that brings customers and companies together. Salesforce, Inc. (NYSE:CRM)'s service includes sales to store data, monitor leads and progress, forecast opportunities,
Salesforce, Inc. (NYSE:CRM) surged by about 98% in 2023 as benefited from artificial intelligence playing a pivotal role in business operations across multiple industries. Salesforce, Inc. (NYSE:CRM)'s data cloud suite powered by AI continues to gain traction, with companies preparing for the eventual adoption of the technology.
Light Street Capital reduced its holdings in Salesforce, Inc. (NYSE:CRM) by 44% to $11.27 million. According to data from Insider Monkey's database, a total of 122 elite hedge funds held positions in Salesforce Inc. (NYSE:CRM) stock in the third quarter of 2023. Paul Cantor, Joseph Weiss, and Will Wurm’s Beech Hill Partners was one of the significant shareholder of the company in the fourth quarter of 2023, with shares worth $3.31 million.
Here is what Polen Capital said about Salesforce, Inc. (NYSE:CRM) in its fourth quarter 2023 investor letter:
“In the fourth quarter, the top relative and absolute contributors to the Portfolio’s performance were Netflix, ServiceNow, and Salesforce, Inc. (NYSE:CRM).
Salesforce has continued to grow its revenues at what we see as a healthy rate despite market concerns about the impact of the weaker macroeconomy on its business and penetration rates in its core CRM offering. Even its most mature and largest offerings, Sales Cloud and Service Cloud, are still growing revenue at double-digit rates. In addition, management realized that their cost structure, especially in salespeople, had gotten too bloated. Over the past year and a half, the company has run a much more streamlined expense structure that has led to strong operating margin expansion and earnings growth. Importantly, we do not feel Salesforce has cut into its innovation or sales muscle through these cost cuts but has eliminated unnecessary excess fat from the organization.”
14. Synopsys, Inc. (NASDAQ:SNPS)
Light Street Capital’s Equity Stake: $11.49 Million
Number of Hedge fund Holders: 57
Synopsys, Inc. (NASDAQ:SNPS) is a chip design software maker that provides electronic design automation software products to design and test integrated circuits. Synopsys, Inc. (NASDAQ:SNPS) has moved to expand its addressable market and boost margin with a $35 billion acquisition of Ansys (NASDAQ:ANSS).
The acquisition push comes on Synopsys, Inc. (NASDAQ:SNPS) rallying by about 55% in 2023 as it benefited from strong demand for its solutions and the artificial intelligence frenzy. Synopsys, Inc. (NASDAQ:SNPS) was the latest addition in Light Street Capital’s portfolio following the acquisition of $11.49 million worth of stakes in Q3 2023.
According to data from Insider Monkey's database, a total of 57 elite hedge funds held positions in Synopsys, Inc. (NASDAQ:SNPS) stock in the third quarter of 2023. Catherine D. Wood’s ARK Investment Management was one of the prominent shareholder of Synopsys, Inc. (NASDAQ:SNPS) with 36,714 shares worth $18.90 million.
Here is what TimesSquare Capital Management, an equity investment management company, said about Synopsys, Inc. (NASDAQ:SNPS) in its Q3 2023 investor letter:
“Across the Information Technology universe, we seek companies possessing differentiated capabilities, products, and services. Synopsys, Inc. (NASDAQ:SNPS), a supplier of electronic design automation software for use in designing and testing integrated circuits, edged forward 5%. The company reported a solid fiscal fourth quarter and raised forward guidance. Despite macroeconomic concerns, their customers remain focused on developing next generation semiconductors with their electric design automation tools. We trimmed the position as it approached our price target.”
13. Nerdy, Inc. (NYSE:NRDY)
Light Street Capital’s Equity Stake: $11.93 Million
Number of Hedge fund Holders: 22
Nerdy, Inc. (NYSE:NRDY) is a technology company that operates a platform that allows people to learn online. Nerdy, Inc. (NYSE:NRDY)’s purpose-built proprietary platform leverages technology, including AI to connect students, users, parents, guardians, and purchasers of various ages to tutors, instructors, subject matter experts, educators, and other professionals.
Nerdy, Inc. (NYSE:NRDY) was up by 47% in 2023 helping propel Light Street Capital into a 46% return. However, the hedge fund trimmed its exposure in the stock by 6% to $11.93 million in Q3 2023.
According to the data from Insider Monkey, the number of hedge funds that owned shares of Nerdy, Inc. (NYSE:NRDY) decreased from 25 in the second quarter of 2023 to 22 in the third quarter of 2023, which means that three hedge funds sold their stakes in the company during that period.
12. indie Semiconductor, Inc. (NASDAQ:INDI)
Light Street Capital’s Equity Stake: $11.95 Million
Number of Hedge fund Holders: 25
indie Semiconductor, Inc. (NASDAQ:INDI) is a technology company that provides automotive semiconductors and software solutions for advanced driver assistance systems, autonomous vehicles, and electrification applications.
indie Semiconductor, Inc. (NASDAQ:INDI) is benefiting as the digitization of cars rapidly increases thanks to strong demand for electric vehicles and in-cabin infotainment. Indie Semiconductor outperformed the S&P 500 on rallying 34% in 2023 helping propel Light Street Capital to a gain of 46%. Light Street Capital reduced its holdings in indie Semiconductor, Inc. (NASDAQ:INDI) by 17% to $11.95 Million.
According to data from Insider Monkey's database, a total of 25 elite hedge funds held positions in indie Semiconductor Inc. (NASDAQ:INDI). George Soros’ Soros Fund Management was the most significant shareholder of indie Semiconductor, Inc. (NASDAQ:INDI) with shares worth $34.77 million.
In its Q3 2023 investor letter, Baron Technology Fund mentioned Indie Semiconductor, Inc. (NASDAQ:INDI). Here is what it said:
“Indie Semiconductor, Inc. is a fabless designer, developer, and marketer of automotive semiconductors for advanced driver assistance systems and connected-car user experience and electrification applications. Shares fell during the quarter due to investor concerns that near-term automotive semiconductor demand will face headwinds because of excess inventory in the automotive semiconductor supply chain, combined with third quarter revenue guidance that slightly missed consensus expectations due to a customer slightly delaying the launch of a new vehicle model where indie had secured a design win (so delayed, not lost sales). As indie steadily ramps new product and design wins into production, we are confident the company will achieve its targeted model of profitability by year end, while effectively doubling revenues as it delivers on its $4.3 billion and growing strategic backlog. We believe indie has the potential to grow from its $200 million revenue run rate today to its targeted $500 million by 2025 and $1 billion by 2028. In the years ahead, indie should benefit as it develops differentiated, highly integrated, energy-efficient products, while the automotive semiconductor vertical remains highly attractive over the long term.”
11. Amazon.com Inc (NASDAQ:AMZN)
Light Street Capital’s Equity Stake: $15.17 Million Number of Hedge fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) is a multinational technology company with diverse business interests. Amazon.com, Inc. (NASDAQ:AMZN) operates an e-commerce platform that connects merchants and consumers worldwide.
As Light Street Capital returned 46% in 2023, Amazon.com, Inc. (NASDAQ:AMZN) was one of the key drivers as the stock rallied 54% and benefited from robust growth in its core business. AWS recorded a 12% year-over-year increase in sales to $23.1 billion. Light Street Capital Increased its stakes in Amazon.com, Inc. (NASDAQ:AMZN) by 6% in Q3 2023 to $15.17 million.
According to Insider Monkey's database data, 286 elite hedge funds held positions in Amazon.com, Inc. (NASDAQ:AMZN), up from 278 in the previous quarter. Notably, Paul Cantor, Joseph Weiss, and Will Wurm’s Beech Hill Partners emerged as one of the significant stakeholder in the company, with 52,700 shares valued at $8 million.
In its fourth quarter 2023 investor letter, Polen Capital stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN):
“For the full year, the top relative and absolute contributors were Amazon.com, Inc. (NASDAQ:AMZN), Salesforce, and ServiceNow. Amazon shares appreciated 88% in 2023, driven primarily by rapidly expanding operating profit margins and free cash flow growth. After the pandemic, Amazon experienced a period of inefficiency and overinvestment in its distribution and logistics infrastructure. Amazon is now leveraging these investments as growth returned to its e-commerce business in 2023 after a highly unusual 2022. At the same time, Amazon’s rapidly growing and high-margin advertising business is contributing strongly to the entire company’s operating profit growth. The AWS (Amazon Web Services) cloud infrastructure and services business continued to slow in 2023 as customers anticipating a more difficult economic environment looked to save money on their cloud spend, but these cloud spending optimizations began to stabilize in the second half of 2023. We now expect customer interest in generative AI will begin to contribute to growth.”
10. Cellebrite Di Ltd. (NASDAQ:CLBT)
Light Street Capital’s Equity Stake: $15.74 Million
Number of Hedge fund Holders: 23
Cellebrite Di Ltd. (NASDAQ:CLBT) is a software infrastructure company that develops solutions for legally sanctioned investigations. Its DI suite of solutions allows users to collect, review, analyze, and manage digital data across the investigative lifecycle concerning legally sanctioned investigations.
Cellebrite Di Ltd. (NASDAQ:CLBT) was one of the best-performing stocks in the Light Street Capital portfolio as it rallied by 95% in 2023, outperforming the 24% gain for the S&P 500 over the same period.
The hedge fund benefited from the rally, having first bought a stake in Cellebrite Di Ltd. (NASDAQ:CLBT) in Q3 2021 and ended up with stakes worth $15.74 million as of Q3 2023.
For their Q3 2023 shareholdings, 23 of the 910 hedge funds profiled by Insider Monkey held a stake in Cellebrite DI Ltd (NASDAQ: CLBT). Catherine D. Wood’s ARK Investment Management was a remarkable shareholder of Cellebrite Di Ltd. (NASDAQ:CLBT) with stakes worth $2.26 million.
Here is what Greenhaven Road Capital said about Cellebrite DI Ltd. (NASDAQ:CLBT) in its Q3 2023 investor letter:
“Cellebrite DI Ltd. (NASDAQ:CLBT)– Cellebrite provides tools to law enforcement to extract data (evidence) from cell phones, analyze the data, and manage the data. Solving many crimes without their tools is inconceivable. They are mission critical. One of the best indicators of business quality is pricing power. The ability to raise price only comes with attributes such as high switching costs and a limited competitive landscape. Cellebrite benefits from both, but has not aggressively flexed their pricing power to date. After being acquired by private equity, the company’s competitor, Grayshift, has reportedly been raising prices by more than 30% on select products. Cellebrite is taking more of a velvet glove approach, offering newer products with more functionality at higher prices, e.g., their “Premium” offering, which offers additional features and is, in fact, “premium” but is also 40-50% more expensive. The combination of raising prices, introducing new products, and cross-selling analytics products should fuel growth for the next several years. Extracting data from devices and making sense of it is not going to get easier nor is it going to become less mission-critical. Law enforcement needs tools to fight crime, and Cellebrite is the leading “arms dealer” to collect and review data from mobile phones.
Over the course of the quarter, Cellebrite hired an Executive Chairman from the private equity firm Vista Equity Partners. It will be interesting to see if he can apply any of the “Vista playbook” to Cellebrite operations, and if he can help put some of the $230M+ in cash that Cellebrite has on its books to work via acquisitions. At just over 3x 2024 revenue and profitable, Cellebrite is priced at a significant discount to peers, as if growth will evaporate. I suspect that, over time, growth occurs and multiple expands, or a firm like Vista Equity Partners acquires them.”
9. Tesla, Inc. (NASDAQ:TSLA)
Light Street Capital’s Equity Stake: $15.79 Million
Number of Hedge fund Holders: 81
Tesla, Inc. (NASDAQ:TSLA) is a pioneer electric vehicle company that designs, develops, manufactures and sells zero emission motor vehicles, energy generation and storage systems. . Tesla, Inc. (NASDAQ:TSLA)'s automotive segment is known for electric cars, while the energy generation and storage segment designs, manufactures, and sells solar energy generation and energy storage products.
While Tesla, Inc. (NASDAQ:TSLA) was under pressure late last year, it still finished the year up 123%, helping Light Street Capital return 43%. Nevertheless, the hedge fund trimmed its stakes in Tesla, Inc. (NASDAQ:TSLA) by 42% in Q3 2023 to $15.79 million.
For their September quarter of 2023 shareholdings, 81 out of the 910 hedge funds part of Insider Monkey's database were Tesla, Inc. (NASDAQ:TSLA) investors. Catherine D. Wood’s ARK Investment Management was one of the significant shareholder of Tesla, Inc. (NASDAQ:TSLA) with stakes worth $944.85 million in the fourth quarter of 2023.
Tsai Capital Corporation, an investment management firm, mentioned Tesla, Inc. (NASDAQ:TSLA) in its fourth quarter 2023 investor letter. Here is what the fund said:
“Tesla, Inc. (NASDAQ:TSLA) ($248.48 – up 101.7% for the year. Recent high $299.29): Tesla has significant and underappreciated competitive advantages across multiple verticals including electric vehicles, software and energy storage. Misunderstood by much of Wall Street – and consequently a favorite of short sellers – Tesla continues to grow rapidly and increase its lead over the competition while delighting consumers in the process. Despite his unconventional (and sometimes off-putting) personality, Elon Musk is a visionary who has created enormous shareholder value. Musk is also a long-term thinker who has embraced the scale-economies-shared business model favored by Henry Ford and Jeff Bezos, intentionally reducing prices, increasing the customer value proposition and expanding the total addressable market. Tesla’s massive scale and cost advantages are now challenging the viability of legacy auto, which has hundreds of billions of dollars of outdated property, plant and equipment in a world that is rapidly transitioning to electric vehicles (EVs). While we expect competition for EVs to intensify and for Tesla to lose market share over time, we also believe the company will increase production and deliveries from approximately 1.8 million vehicles today to approximately 15 million vehicles in 2030 and further its lead in autonomous driving capability. In fact, we expect Tesla will eventually license its autonomous driving software, creating high-margin (70-80%), recurring licensing revenue. Tesla is also one of only two companies that dominate the energy storage market, which has the potential to grow to several hundred billion in revenue as power plants around the world increase their focus on renewable energy. Our investment in Tesla is aligned with our preference for companies that have strong balance sheets and the managerial skill to reinvest capital at high rates of return into large addressable markets.”
8. JFrog Ltd. (NASDAQ:FROG)
Light Street Capital’s Equity Stake: $15.85 Million
Number of Hedge fund Holders: 30
Based in Sunnyvale, California, JFrog Ltd. (NASDAQ:FROG) is a software development company that offers a platform that allows enterprises to manage the way they develop and release software updates. JFrog Artifactory is a package repository that allows teams and organizations to store, update, and manage their software packages at any scale.
JFrog Ltd. (NASDAQ:FROG) was up 34% in 2023, turning out to be one of the performers as Light Street Capital returned 43%. The hedge fund increased its exposure in JFrog Ltd. (NASDAQ:FROG) by 11% in Q3 2023 to stakes worth $15.84 million.
Insider Monkey's third quarter of 2023 survey covering 910 hedge funds revealed that 30 institutional investors had invested in JFrog Ltd. (NASDAQ:FROG), up from 27 in the previous quarter.
Here is what Madison Investments said about JFrog Ltd. (NASDAQ:FROG) in its Q3 2023 investor letter:
“In the third quarter, we added two investments to the portfolio (FROG and HAYW). Software provider JFrog Ltd. (NASDAQ:FROG) sells software tools to the Dev/Sec/Ops space (Development, Security and Operations). Their software forms a critical component of the software development chain. Essentially, large enterprises use FROG’s tools to develop, secure and operate their software infrastructure. We believe J Frog is a very strategic asset that dominates its niche. The company is profitable, with recurring revenues that drive material cash flow, buttressed with a strong balance sheet.”
7. Broadcom Inc. (NASDAQ:AVGO)
Light Street Capital’s Equity Stake: $17.31 Million
Number of Hedge fund Holders: 87
Palo Alto, California-based Broadcom Inc. (NASDAQ:AVGO) designs, develops, and supplies semiconductor devices. The network chipmaker was one of the stocks that exploded as investors snapped up stocks tied to the artificial intelligence boom last year.
Broadcom Inc. (NASDAQ:AVGO) nearly doubled in value after rallying by 98% as it delivered better-than-expected financial results bolstered by AI-related sales growth. As Light Street Capital returned 46% in 2023, it has turned to Broadcom Inc. (NASDAQ:AVGO) to sustain the momentum in 2024. The hedge fund added the stock into the portfolio by acquiring stakes worth $17.31 million in Q3 2023.
87 out of the 910 hedge funds part of Insider Monkey's database had bought Broadcom Inc. (NASDAQ:AVGO)'s shares as of Q3 2023 end, compared to 72 in the previous quarter. Paul Cantor, Joseph Weiss, and Will Wurm’s Beech Hill Partners was one of the prominent investor via its $3.79 million stake.
6. Alphabet Inc. (NASDAQ:GOOG)
Light Street Capital’s Equity Stake: $18.34 Million
Number of Hedge fund Holders: 163
Alphabet Inc. (NASDAQ:GOOG) is a communication services company but is often billed as a technology juggernaut, given its vast product line. Alphabet Inc. (NASDAQ:GOOG) is also involved in the retail of electronic devices, including smartphones, ultra-thin notebooks, and speakers.
Alphabet Inc. (NASDAQ:GOOG) exploded in 2023, rallying by about 56% as it also benefited from the artificial intelligence boom and overall market bullishness. Light Street Capital reduced its holdings in Alphabet Inc. (NASDAQ:GOOG) by 19% in Q3 2023 to $18.34 million.
As of the close of the third quarter of 2023, 163 hedge funds held stakes in Alphabet Inc. (NASDAQ:GOOG). One of the prominent stakeholder in Alphabet Inc. (NASDAQ:GOOG) in the fourth quarter of 2023 was Catherine D. Wood's ARK Investment Management, which had $29.21 million stakes in the firm.
Ensemble Capital Management made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q4 2023 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) (8.52% weight in the Fund): Google’s earnings report in October showed its core advertising business accelerating to double digit growth as the digital advertising recession of 2022 and early 2023 fades away. However, the company’s Cloud division, which is expected to generate growth from selling access to artificial intelligence services, saw its growth rate slow modestly. Juxtaposed with Microsoft’s Cloud business seeing growth pick up slightly, investors sold off Google’s stock on the report. While the stock recovered to new highs by the end of the year, the earnings report set back caused the stock to trail behind the S&P 500 with a gain of 6.8% for the quarter.”
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