Here’s Crossroads Capital Investment’s Thesis for Magnite (MGNI)

Crossroads Capital LLC, an investment management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Crossroads Capital Investment Partners, LP fell 7.6% net of all fees and expenses in the first quarter of 2025. The fund has compounded at 13.3% and 16.0%, respectively, since inception, and over the last five years outperformed its most suitable benchmarks. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Crossroads Capital highlighted stocks such as Magnite, Inc. (NASDAQ:MGNI). Headquartered in Billerica, Massachusetts, Magnite, Inc. (NASDAQ:MGNI) offers materials and process solutions for the semiconductor and other high-technology industries. The one-month return of Magnite, Inc. (NASDAQ:MGNI) was 16.56%, and its shares gained 36.12% of their value over the last 52 weeks.  On June 6, 2025, Magnite, Inc. (NASDAQ:MGNI) stock closed at $17.60 per share, with a market capitalization of $2.484 billion.

Crossroads Capital stated the following regarding Magnite, Inc. (NASDAQ:MGNI) in its Q1 2025 investor letter:

“Magnite, Inc. (NASDAQ:MGNI) is the largest independent programmatic Sell-Side Platform (SSP), an entity that provides technology solutions to automate the purchase and sale of digital advertising inventory on behalf of publishers. The company arose from the merger of The Rubicon Project and Telaria in 2020. It then acquired a CTV competitor SpotX in early 2021 to become the third-biggest CTV SSP, after Comcast’s Freewheel and the Darth Vader of the AdTech world, Google. Critically, Magnite stands today as the key enabler of Connected TV (CTV) advertising for streaming platforms, an increasingly crucial revenue source for media parent companies around the world.

The company’s contract win with Netflix is proof of its differentiation in the space, and was something we expected after hearing back in early 2023 that Microsoft’s Xandr ad tech stack wasn’t capable of true CTV ad delivery. The company has impressive incremental EBITDA margins (75%+), and after spending the last few years consolidating its acquisitions, is in a place to capitalize on growth opportunities, generating cash flow far in excess of current market expectations…” (Click here to read the full text)

Why Magnite, Inc. (MGNI) Skyrocketed This Week

A marketing manager examining a publisher’s digital inventory on a laptop.

Magnite, Inc. (NASDAQ:MGNI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Magnite, Inc. (NASDAQ:MGNI) at the end of the first quarter, which was 25 in the previous quarter. In Q1 2025, Magnite, Inc. (NASDAQ:MGNI) reported total revenue of $156 million, up 4% from Q1 2024. While we acknowledge the potential of Magnite, Inc. (NASDAQ:MGNI) 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 undervalued AI stock set for massive gains.

In another article, we covered Magnite, Inc. (NASDAQ:MGNI) and shared the list of best small-cap stocks to buy before they explode. In its Q4 2024 investor letter, Crossroads Capital noted that Magnite, Inc. (NASDAQ:MGNI) is well-positioned for increased revenue and expanding market share. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.