Underweight Tesla (TSLA) Exposure Impacted Aristotle Atlantic Large Cap Growth Strategy’s Performance
Aristotle Atlantic Partners, LLC, an investment advisor, released its “Large Cap Growth Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The U.S. stock market wrapped up the year positively, as the S&P 500 Index increased by 2.41% in the quarter while the Bloomberg U.S. Aggregate Bond Index declined, falling 3.06% for the quarter. In the fourth quarter, Aristotle Atlantic’s Large Cap Growth Strategy delivered 6.29% gross of fees (6.15% net of fees) underperforming the Russell 1000 Growth Index’s 7.07% return. Both Security selection and allocation effects led the portfolio to underperform in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Aristotle Atlantic Large Cap Growth Strategy highlighted stocks like Tesla, Inc. (NASDAQ:TSLA), in the fourth quarter 2024 investor letter. Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, as well as energy generation and storage systems. The one-month return of Tesla, Inc. (NASDAQ:TSLA) was -2.71%, and its shares gained 107.28% of their value over the last 52 weeks. On February 3, 2024, Tesla, Inc. (NASDAQ:TSLA) stock closed at $383.68 per share with a market capitalization of $1.234 trillion.
Aristotle Atlantic Large Cap Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) detracted from performance in the fourth quarter of 2024. The stock had a strong performance in the fourth quarter, and our portfolio has an underweight position relative to the benchmark weight. Tesla reported better-than-expected third quarter earnings in late October. Given the CEO of Tesla’s position as an advisor to President-elect Trump, performance in the shares accelerated following the U.S. presidential election. There are expectations that regulation for autonomous driving will be centralized with the federal government. There have been reports in the press that tax incentives for electric vehicles will be eliminated or reduced, which could have a negative impact on Tesla’s subscale competitors.”
Tesla, Inc. (NASDAQ:TSLA) is in 23rd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 99 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the third quarter which was 85 in the previous quarter. While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) 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.