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Here’s Why Five9 (FIVN) Declined Despite Better-Than-Expected Earnings Results and Guidance

RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. During the first quarter, the markets performed strongly. The Russell 1000 Growth Index (RLG) and the S&P 500 index returned 11.41% and 10.56%, respectively during the quarter and RPX returned 9.20%. The monthly inflation readings in the first quarter exceeded market expectations. A couple of megatrends that drove the markets higher were GLP-1 weight loss drugs and everything related to artificial intelligence (AI). In addition, please check the fund’s top five holdings to know its best picks in 2024.

RiverPark Large Growth Fund highlighted stocks like Five9, Inc. (NASDAQ:FIVN), in the first quarter 2024 investor letter. Five9, Inc. (NASDAQ:FIVN) provides intelligent cloud software for contact centers. One-month return of Five9, Inc. (NASDAQ:FIVN) was -19.68%, and its shares lost 33.88% of their value over the last 52 weeks. On May 30, 2024, Five9, Inc. (NASDAQ:FIVN) stock closed at $46.49 per share with a market capitalization of $3.434 billion.

RiverPark Large Growth Fund stated the following regarding Five9, Inc. (NASDAQ:FIVN) in its first quarter 2024 investor letter:

“Five9, Inc. (NASDAQ:FIVN): FIVN was a top detractor in 1Q24 despite better-than-expected 4Q earnings and guidance. FIVN reported $239 million of revenue, 15% year-over-year revenue growth and $1 million higher than estimates, and $0.61 of EPS, 13% growth and $0.13 better than estimates. Management guided 1Q24 and full year 2024 in line with investor expectations, but some investors had expected guidance to be raised.

Five9 is a leader in providing cloud-based software to contact centers. The company’s suite of applications provides contact center agents with a unified communication platform (voice, email, text, chat, web, social) and a desktop of tools to help agents engage customers more quickly and effectively. FIVN is well-positioned as contact centers transition to the cloud and has high customer retention (112% net revenue retention last quarter). The company doubled its strategic sales team over the past year and signed new partnerships with AT&T, CDW and Microsoft. We believe the company can grow its top line in the high teens, while improving on its 4Q 60% gross margin and 16% operating income margin, leading to 20%+ EPS growth for the foreseeable future.”

An IT engineer working on a laptop as planograms for a cloud-based virtual contact center platform appear on the monitor.

Five9, Inc. (NASDAQ:FIVN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Five9, Inc. (NASDAQ:FIVN) at the end of the first quarter which was 52 in the previous quarter.

In another article, we discussed Five9, Inc. (NASDAQ:FIVN) and shared Conestoga Capital Advisors’ views on the company. Also, Five9, Inc. (NASDAQ:FIVN) was the top detractor of RiverPark Large Growth Fund in the third quarter 2023. 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…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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

My name is Inan Dogan. I’m the co-founder and Research Director of Insider Monkey. I have an important message for you today.

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We looked under the cover and realized they were wrong.

We alerted our subscribers, and BTI returned 90% in just 16 months.

Now if you had invested just $10,000 in BTI in June 2024, you’d be sitting on $19,000 in October 2025.

Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

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This pattern is a hallmark of our 16.5% annual return track record. The current opportunity offers a 400% upside potential—dwarfing even our 90% BTI return.

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