Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The U.S. equities have experienced a significant performance surge over the past two years. In the fourth quarter, the strategy returned 4.9% (gross) and 4.65% (net) compared to 7.07% for the Russell 1000 Growth Index and 2.41% for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.

In its fourth quarter 2024 investor letter, Polen Focus Growth Strategy emphasized stocks such as Tesla, Inc. (NASDAQ:TSLA). 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 -26.20%, and its shares gained 58.09% of their value over the last 52 weeks. On March 5, 2025, Tesla, Inc. (NASDAQ:TSLA) stock closed at $279.10 per share with a market capitalization of $897.731 billion.

Polen Focus Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:

"The largest relative detractors in the quarter were Tesla, Inc. (NASDAQ:TSLA) (not owned), Thermo Fisher Scientific, and Broadcom (not owned). We’ve spoken at length about our rationale for not owning Tesla. The stock enjoyed a 54% return during the quarter, with effectively all of the share price performance strength coming in the post-election period, as the market expressed a positive view on Elon Musk’s prominent role in the incoming Trump administration and its potential implications for Tesla. While we agree this development should be a net positive for Tesla and recognize the company’s interesting future prospects for autonomous driving and humanoid robots, its current valuation demands that shareholders pay primarily for potential innovations that have yet to materialize, with uncertain risks and timelines, presenting a different type of risk profile than we are comfortable with. Today, Tesla is an automobile manufacturer limited to the higher-income segment and is increasingly challenged to sell vehicles when interest rates are not zero. As such, we continue to question the company’s long-term growth profile, its ability to scale a large robotaxi service (which seems to be the source of euphoria in Tesla shares), and its corporate governance."

Tesla, Inc. (NASDAQ:TSLA) is in 23rd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 126 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the fourth quarter compared to 99 in the third 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.

In another article, we discussed Tesla, Inc. (NASDAQ:TSLA) and shared the list of AI stocks making headlines. In addition, please check out our hedge fund investor letters Q4 2024 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.