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Baron Emerging Markets Fund Added Tencent Music Entertainment Group (TME) to its Portfolio in Q1

Baron Funds, an investment management company, released its “Baron Emerging Markets Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund returned 2.50% (Institutional Shares) compared to a 2.37% return for the MSCI EM Index (primary benchmark Index) and a 2.98% gain for the MSCI EM IMI Growth Index (the Proxy Benchmark). The fund performed in line with the primary benchmark while modestly underperformed the proxy benchmark. The recent strength in equities is due to the Fed’s indication that it will proceed with multiple rate cuts this year. To know the best picks for the fund in 2024, please check the top five holdings of the fund.

Baron Emerging Markets Fund highlighted stocks like Tencent Music Entertainment Group (NYSE:TME), in the first quarter 2024 investor letter. Tencent Music Entertainment Group (NYSE:TME) operates online music entertainment platforms with a market capitalization of $25.398 billion. The one-month return of Tencent Music Entertainment Group (NYSE:TME) was 14.91%, and its shares gained 100.00% of their value over the last 52 weeks. On May 24, 2024, Tencent Music Entertainment Group (NYSE:TME) stock closed at $14.80 per share.

Baron Emerging Markets Fund stated the following regarding Tencent Music Entertainment Group (NYSE:TME) in its first quarter 2024 investor letter:

“Tencent Music Entertainment Group (NYSE:TME), a listed subsidiary of Tencent Holdings Limited, is the largest online music platform in China. The company has a dominant 70% share of music streaming and the most comprehensive library of content in China. After navigating a decline in its legacy music livestreaming business over the last few years, TME has now transitioned to a pure-play music streaming model, improving earnings quality and durability. Music streaming is still in its early stages in China, with paid penetration of only 18% and average revenue per paying user (ARPPU) of only RMB 10.7 (U.S. $1.50) per month, a fraction of global peers. As a result, we believe the company has a long runway to drive at least high-teens subscription revenue growth over the intermediate term via both user growth and increasing ARPPU, driving a doubling of earnings over the next four to five years. As the business scales and the self-produced content mix rises, TME is also poised for margin expansion, while China’s more fragmented music label landscape compared to other global markets bodes well for the company’s long-term profitability.”

Photo by wilfried Vowoto on Unsplash

In the quarter Tencent Music Entertainment Group’s (NYSE:TME) gross margin is 40.9% increased by 7.8% year-over-year, an increase of 2.6% quarter-over-quarter. Tencent Music Entertainment Group (NYSE:TME) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Tencent Music Entertainment Group (NYSE:TME) at the end of the first quarter which was 23 in the previous quarter.

In another article, we discussed Tencent Music Entertainment Group (NYSE:TME) and shared the list of unstoppable growth stocks to buy. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

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A few years from now, you’ll wish you’d owned this stock.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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