Baron Funds, an investment management firm, released its “Baron Global Advantage Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund was up 5.6% (institutional shares) in the third quarter compared to a 6.6% gain for the MSCI ACWI Index (the Index) and a 4.1% gain for the MSCI ACWI Growth Index, the Fund’s benchmark. In the third quarter, global equity indices rose, with several reaching new all-time highs. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
Baron Global Advantage Fund highlighted stocks like Snowflake Inc. (NYSE:SNOW), in the third quarter 2024 investor letter. Snowflake Inc. (NYSE:SNOW) is a cloud-based data platform provider for various organizations. The one-month return of Snowflake Inc. (NYSE:SNOW) was -0.40%, and its shares lost 22.98% of their value over the last 52 weeks. On November 7, 2024, Snowflake Inc. (NYSE:SNOW) stock closed at $123.54 per share with a market capitalization of $41.411 billion.
Baron Global Advantage Fund stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q3 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a leading cloud data platform predominantly used for data analytics. Shares fell 15.2% in the third quarter due to a cybersecurity incident, a shifting competitive landscape, a change in leadership, and general macro complexities which are pressuring customer IT budgets. With generative AI (Gen AI) front and center, both investors and customers are closely evaluating Snowflake’s positioning in the future data ecosystem. Databricks and other competitors whose core users are data scientists who are also key buyers of Gen AI technologies, are benefiting. In addition, while Snowflake’s product innovation push should fuel future growth, it may also lead to short-term headwinds to profitability. Management reported healthy demand for its core data analytics, evidenced by solid growth rates among current customers alongside new go-to-market initiatives that could support growth. We are optimistic the new CEO, Sridhar Ramaswamy, can lead the company towards an AI-centric strategy, and therefore remain shareholders.”
A software engineer at work, surrounded by a wall of computer monitors connected to a ‘Data Cloud’ platform.
Snowflake Inc. (NYSE:SNOW) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 69 hedge fund portfolios held Snowflake Inc. (NYSE:SNOW) at the end of the second quarter which was 73 in the previous quarter. Snowflake Inc.’s (NYSE:SNOW) Q2 product revenue reached $829 million, a 30% increase over the previous year. While we acknowledge the potential of Snowflake Inc. (NYSE:SNOW) 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.
