JDP Capital Management, an investment management company, released its fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. 2024 proved to be an excellent year for the market and an even more impressive one for the fund. In the fourth quarter, the fund generated a gain of 10.4%, resulting in a total return of 47.9% for the year, net of fees for investors. In comparison, the S&P 500 recorded a 2.4% increase in the fourth quarter and a 25% rise for the entire year, assuming dividends were reinvested back into the index. For more information on the fund’s best picks in 2024, please check its top five holdings.

In its fourth quarter 2024 investor letter, JDP Capital Management emphasized stocks such as Roku, Inc. (NASDAQ:ROKU). Headquartered in San Jose, California, Roku, Inc. (NASDAQ:ROKU) is a TV streaming platform. The one-month return of Roku, Inc. (NASDAQ:ROKU) was -12.24%, and its shares gained 12.08% of their value over the last 52 weeks. On March 31, 2025, Roku, Inc. (NASDAQ:ROKU) stock closed at $70.44 per share with a market capitalization of $10.572 billion.

JDP Capital Management stated the following regarding Roku, Inc. (NASDAQ:ROKU) in its Q4 2024 investor letter:

Roku, Inc. (NASDAQ:ROKU) was down 15% in 2024 closing at $77.38 per share, about 20% above our cost basis. The company has an enterprise value of about $9 billion, no debt, and trades for a little over 2x estimated 2025 platform revenue (hardware revenue excluded).12 Roku has been undervalued and under-owned for so long that a positive re-rating of the stock to an acquisition value would justify a multi-bagger return…

Roku has not been able to shake its reputation as a posterchild for the COVID-era stock boom. What started as a slowdown in platform revenue in 2022 morphed into a bearish narrative that the company lacks a competitive advantage and pricing power in Connected TV advertising (a narrative that plagued Spotify's stock for years).

The way we consume TV has changed dramatically over the last few years. When I first started researching Roku in 2016, most TVs were not connected to the internet. The consensus view at the time was that streamed TV content could only be a niche at best compared to cable TV…” (Click here to read the full text)

A large movie theatre filled with people enjoying a film streaming on a smart TV.

Roku, Inc. (NASDAQ:ROKU) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Roku, Inc. (NASDAQ:ROKU) at the end of the fourth quarter compared to 40 in the third quarter. While we acknowledge the potential of Roku, Inc. (NASDAQ:ROKU) 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.

We covered Roku, Inc. (NASDAQ:ROKU) in another article, where we shared the list of subscription stocks Jim Cramer talked recently. 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.