This Under-the-Radar Hedge Fund Is Betting Big on These 3 Explosive Stocks
Most investors probably never heard of Nehal Chopra, but since founding Ratan Capital Management in 2009, the Mumbai-born hedge fund operator has established herself as a rare female leader in the male-dominated hedge fund industry. Starting with $25 million in seed money from famed investor Julian Robertson’s Tiger Management, Ratan Capital — initially Tiger Ratan […] The post This Under-the-Radar Hedge Fund Is Betting Big on These 3 Explosive Stocks appeared first on 24/7 Wall St..
A rare female hedge fund manager, Chopra leverages an event-driven strategy with $290 million in AUM.
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Most investors probably never heard of Nehal Chopra, but since founding Ratan Capital Management in 2009, the Mumbai-born hedge fund operator has established herself as a rare female leader in the male-dominated hedge fund industry.
Starting with $25 million in seed money from famed investor Julian Robertson’s Tiger Management, Ratan Capital — initially Tiger Ratan — focuses on event-driven investments, targeting mispricings from corporate changes like mergers and bankruptcies.
Since inception, the fund has delivered an impressive average annual return of approximately 16% to 19%, outperforming many industry peers. Over the past three years, Ratan achieved a remarkable 57% average annual return, well ahead of peers including Ray Dalio, Daniel Loeb, Bill Ackman, and even Warren Buffett.
Despite setbacks, including a 52% drawdown in 2015 to 2016 due to a big bet on Valeant Pharmaceuticals, Chopra’s resilience and strategic acumen have outshone larger, better-known hedge funds. Managing $290 million in assets, her concentrated portfolio of 29 stocks continues to draw attention, cementing her status as a standout in the $3 trillion hedge fund landscape.
Chopra completely sold off a dozen stocks in her portfolio in the first quarter, but made even bigger bets on a handful of others, including her largest holding.
AppLovin (APP)
One of the biggest investments Chopra made was opening a new position in AppLovin (NASDAQ:APP), the AI-driven advertising platform. She purchased 52,700 shares at an average price of $294 per share. It immediately became a top-10 holding in Chopra’s portfolio.
AppLovin’s AXON 2.0 platform and the strategic pivot to high-margin ad tech, position the ad agency for stellar growth a Wall Street is forecasting APP will expand earnings 47% annually for the next five years.
While first-quarter revenue of $1.48 billion was up 40% from last year, ad revenue surged 71% to $1.16 billion. Adjusted EBITDA soared 83% to $1.01 billion, reflecting an 81% ad segment margin. The $900 million sale of its gaming unit to Tripledot Studios sharpens APP’s focus on advertising, targeting a $200 billion e-commerce ad market.
Analysts project 27.8% revenue growth for the second quarter and 98% EPS growth, along with 21% and 50% growth for the full year.
Despite a high 66.9x P/E ratio, AppLovin’s $826 million in Q1 free cash flow and 287% return on equity signal efficiency. Morgan Stanley’s Overweight rating and $460 per share price target, implying 24% upside, underscore confidence. Volatility persists, but APP’s fundamentals make it a top growth pick.
Broadcom (AVGO)
Broadcom’s (NASDAQ:AVGO) growth trajectory is stellar, driven by its pivotal role in AI infrastructure. With a $1.2 trillion market cap, AVGO’s second-quarter results showed 20% year-over-year revenue growth to $15 billion, with AI semiconductor revenue ramping 46% higher to $4.4 billion. Analysts forecast AI revenue reaching $5.1 billion in Q3, with 60% growth into 2026.
AVGO’s custom AI chip business, serving clients like Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) and Apple (NASDAQ:AAPL), targets a $60 billion to $90 billion market by 2027. The VMware acquisition bolsters its software segment, transitioning to subscriptions for stable cash flows. Despite high debt and valuation concerns, 38 analysts rate AVGO a Buy or better with a $280 per share price target, implying 11% upside.
Broadcom was one of Chopra’s biggest buys, increasing her stake by 69% to 134,650 shares, currently valued at $22.5 million. AVGO stock represents 7.8% of Ratan’ portfolio, good for the sixth largest position.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) is Chopra’s largest stock holding and she increased her position 33% during the quarter. She bought 15,000 at almost $581 per share, giving her 60,800 shares worth $35 million, or 12.1% of the portfolio.
With a $1.8 trillion market cap, Meta still exhibits strong growth potential as the social media leader with 3.43 billion daily active users across Facebook, Instagram, and WhatsApp. Analysts expect revenue and EPS to grow at compound annual growth rates of 13% and 11%, respectively, from 2024 to 2027, driven by targeted advertising and AI-driven ad optimization.
Meta’s Reels platform counters TikTok, while its VR/AR investments via Reality Labs position it for the metaverse’s long-term potential, whatever its current shortcomings are. Despite past challenges, such as Apple’s iOS privacy changes, Meta has adapted by leveraging first-party data and attracting Chinese advertisers.
Trading at 27.5x forward earnings, the stock is undervalued relative to its growth prospects. Risks include regulatory scrutiny and ad market volatility. UBS highlights Meta as a quality AI name, suggesting resilience amid tech rebounds. With robust cash flows and innovation, Meta remains a compelling buy for long-term investors.
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