Fred Alger Management, an investment management company, released its “Alger Spectra Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The US equity market ended the fourth quarter on a strong note, with the S&P surging 2.7%, maintaining its steady upward momentum. Investors’ optimism was supported by better-than-expected corporate earnings, the US Federal Reserve’s further interest rate easing stance, and a resilient macroeconomic backdrop. Improving clarity on trade policy provided additional support. Meanwhile, the quarter was characterized by increasing divergence below the Index’s surface. While AI remains the market’s biggest tailwind, it is being scrutinized for funding, limitations, and potential to return investment. The firm continues to observe secular trends that present attractive investment opportunities. Furthermore, U.S. business spending appears to be rising due to rising demand for AI infrastructure and tax incentives from the One Big Beautiful Bill. Against this backdrop, Class A shares of the Fund underperformed the Russell 3000 Growth Index in Q4 2025. The Information Technology and Utilities contributed to the relative performance of the Fund in the quarter, while the Health Care and Communication Services sectors detracted from performance. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Alger Spectra Fund highlighted stocks such as Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG) stood out as the leading performer of the strategy in the quarter. Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. On January 16, 2026, Alphabet Inc. (NASDAQ:GOOG) stock closed at $330.34 per share. One-month return of Alphabet Inc. (NASDAQ:GOOG) was 7.04%, and its shares gained 67.22% of their value over the last 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of $3.988 trillion.
Alger Spectra Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its fourth quarter 2025 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) is the parent of Google and a global leader in digital advertising, cloud computing, and AI-driven consumer services. Shares contributed positively during the quarter as investors increasingly recognized improving execution across the company’s AI strategy, supported by strong engagement trends and rising AI-related workloads. Google Cloud was a key driver, with management highlighting accelerating usage, including increased AI token processing and continued momentum in the Gemini ecosystem. Sentiment was further supported by strengthening cloud demand and new customer wins, as well as reports that Google may broaden access to its TPU capabilities, including potential deployments beyond Google Cloud.”
Alphabet Inc. (NASDAQ:GOOG) is in the 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 186 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the third quarter which was 178 in the previous quarter. In the third quarter of 2025, Alphabet Inc. (NASDAQ: GOOG) achieved its first-ever $100 billion in revenue. While we acknowledge the risk and potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Alphabet Inc. (NASDAQ:GOOG) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared Wedgewood Partners’ views on the company. In addition, please check out our hedge fund investor letters Q4 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.
