CDT Capital Management, an investment management company, released its annual investor letter. A copy of the letter can be downloaded here. CDT’s quantitative risk framework aims to assess whether the stock market is operating rationally. The letter highlighted a potential “commonsense crisis,” suggesting that investors may be making irrational decisions. The letter discussed on “commonsense violations”. The investors’ analysis indicates that the probability of losses is above average, but solely focusing on the numbers can lead to missing important context. They emphasize that violations of commonsense are evident in the data, and before analyzing the math further, it’s essential to recognize these underlying issues affecting market behavior. In addition, please check the fund’s top five holdings to know its best picks in 2024.
CDT Capital Management highlighted stocks like Apple Inc. (NASDAQ:AAPL), in the third quarter 2024 investor letter. Apple Inc. (NASDAQ:AAPL) is an American multinational company that designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. The one-month return of Apple Inc. (NASDAQ:AAPL) was -1.54%, and its shares gained 30.35% of their value over the last 52 weeks. On January 8, 2025, Apple Inc. (NASDAQ:AAPL) stock closed at $242.70 per share with a market capitalization of $3.669 trillion.
CDT Capital Management stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“The crowd. While this evolution in AI is going to change the world, market expectations for the technology have become unhinged. The crowd, which is more like an exuberant mob, anointed the Mag 7 with spectacular, nonsensical valuations based on the premise that AI will be an amazing, money-printing growth engine for these companies – and the truth is it likely will be. The problem is that the math just isn’t mathing.
Let me explain what I mean by picking on the world’s most valuable stock, Apple Inc. (NASDAQ:AAPL). For background, Apple does not have a robust homegrown AI platform, nor does it have a plan to meaningfully monetize AI from Apple users. Right now, from our perspective, Apple’s, Apple Intelligence strategy of implementing third-party AI tools to stay competitive will likely be more of a cost of doing business than an avenue for sales and yet in 2024, the stock soared +33% based on the AI dream as exemplified by the quote below.
“A golden era of growth for Cupertino is now on the horizon into 2025.”..” (Click here to read the full text)
A busy sidewalk filled with people using Apple devices like iPhones, iPads and Apple Watches.
Apple Inc. (NASDAQ:AAPL) is in 8th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 158 hedge fund portfolios held Apple Inc. (NASDAQ:AAPL) at the end of the third quarter which was 184 in the previous quarter. In the September quarter Apple Inc. (NASDAQ:AAPL) delivered $94.9 billion in revenues, up 6% from a year ago. While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL) 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 Apple Inc. (NASDAQ:AAPL) and shared the list of AI stocks on investors’ radar in January 2025. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.