Sands Capital, an investment management company, released its “Sands Capital Select Growth Fund” Q4 2024 investor letter. A copy of the same can be downloaded here. Select Growth primarily targets U.S. companies that are leading the way in crucial areas of positive structural transformation within the economy. The fund returned 8.8% (net) in the fourth quarter compared to 7.1% return for the benchmark, the Russell 1000 Growth Index. The fund returned 24.3% over the one year period compared to 33.4% return for the Index. You can check the fund’s top 5 holdings to know more about its best picks for 2024.

In its fourth quarter 2024 investor letter, Sands Capital Select Growth Fund emphasized stocks such as Okta, Inc. (NASDAQ:OKTA). Okta, Inc. (NASDAQ:OKTA) is an identity partner that offers Okta’s suite of products and services used to manage and secure identities. The one-month return of Okta, Inc. (NASDAQ:OKTA) was -2.85%, and its shares gained 2.51% of their value over the last 52 weeks. On March 31, 2025, Okta, Inc. (NASDAQ:OKTA) stock closed at $105.22 per share with a market capitalization of $18.747 billion.

Sands Capital Select Growth Fund stated the following regarding Okta, Inc. (NASDAQ:OKTA) in its Q4 2024 investor letter:

"We decided to exit our position in Okta, Inc. (NASDAQ:OKTA) in favor of higher-conviction businesses. We initiated a position in Okta in December 2023, following a data breach that depressed the share price of the business. At that time, our research indicated that shares of the business presented an attractive risk-reward opportunity, as a long-term business impairment from the data breach was unlikely, and Okta remained a key provider of technology within a market—identity—that is large, growing, and consolidating amid private equity buyouts. Moreover, we saw potential tailwinds from changes to its go-to-market strategy and new product cycles.

Over our holding period, Okta delivered significant margin expansion, yet topline growth failed to accelerate. Similar to many software businesses, it continues to face the challenges of weak labor force trends for small and midsized businesses that are forcing clients to renew at lower seat counts, and management has failed to execute well enough to offset these headwinds. While we still see the potential for the business to accelerate growth, we chose to exit our position to fund holdings in businesses we have more confidence will execute on their growth potential."

A mobile application developer programming on a tablet, illustrating the power of the company's adaptive multi-factor authentication.

Okta, Inc. (NASDAQ:OKTA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Okta, Inc. (NASDAQ:OKTA) at the end of the fourth quarter compared to 47 in the third quarter. While we acknowledge the potential of Okta, Inc. (NASDAQ:OKTA) 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 Okta, Inc. (NASDAQ:OKTA) in another article, where we shared the list of best performing growth stocks in 2025. 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.