Sands Capital, an investment management company, recently released its “Sands Capital Technology Innovators Fund” Q1 2025 investor letter. The fund focuses on pioneering businesses worldwide that are key drivers or beneficiaries of significant long-term changes driven by technology. In the first quarter of 2025, the fund returned -10.4% (net), compared to a 9.4% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. The software sector’s choice of securities was the primary factor negatively impacting relative performance.
One of the highlighted stocks in the investor letter was AppLovin Corporation (NASDAQ:APP). AppLovin Corporation develops a software-based platform for advertisers to enhance the marketing and monetization of their content. The stock saw a one-month return of 41.44% and has gained 354.06% of its value over the last 52 weeks. As of May 27, 2025, the stock closed at $380.91 per share, with a market capitalization of $128.895 billion.
In the investor letter, Sands Capital Technology Innovators Fund provided insights on AppLovin Corporation, stating that the stock price decline was a result of a broader selloff in high-beta stocks, exacerbated by multiple short reports. These reports alleged app-install manipulation and improper data attribution, which Sands Capital views as largely unfounded. The fund conducted thorough due diligence, consulting ad fraud experts and a forensic accountant, and found no new concerns that alter their conviction in the stock.
While AppLovin Corporation is not on the list of 30 Most Popular Stocks Among Hedge Funds, the company’s total revenue surged 40% from Q1 2024 to $1.5 billion. Sands Capital believes in the potential of AppLovin Corporation as an investment but sees greater promise in AI stocks for delivering higher returns within a shorter timeframe.
In another article, AppLovin Corporation was analyzed by Carillon Eagle Mid Cap Growth Fund in its Q1 2025 investor letter, attributing its decline to similar factors. Investors can also check out the hedge fund investor letters Q1 2025 page for more insights from leading investors.
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