Fred Alger Management 13F Portfolio

Alger’s biggest incremental bet is doubling down on the core AI hardware/software oligopoly. They added to NVIDIA by +8.2%, Microsoft by +3.6%, Amazon by +1.1%, Alphabet C by +13.4%, Alphabet A by +15.4% and Meta by +12.0% — all positions already showing triple‑digit gains versus their average cost. The message is that earnings power from AI and scaled cloud is compounding faster than price.

The more interesting shift is in the “second wave” of AI infrastructure. New positions in AMD (0.88%) and Micron (up 141.6%) expand their bet on memory and alternative accelerators, while new GlobalFoundries (0.29%) and a sharply higher Seagate stake (up 73.4%) extend the theme into foundry capacity and storage. They also piled into Lumentum, taking shares up 6,208.8%, a clear statement that optical bandwidth is a bottleneck they want to own.

Data platforms and developer‑facing software remain core. New Snowflake exposure (0.53%) and a 335.6% increase in Twilio indicate conviction that data clouds and communications APIs are long‑duration beneficiaries of AI‑driven workloads, not busted growth stories. Incremental buys in AppLovin and Cloudflare (despite a modest trim in NET) reinforce their view that scaled, usage‑based software models retain operating leverage.

Outside pure tech, Alger is quietly building structural growth and pricing power. A new stake in Novo Nordisk at 0.78% and additional Biogen, Natera and Johnson & Johnson signal belief that GLP‑1s and specialty therapies still have a long earnings runway. They added to Talen Energy by 30.4% and to GE Vernova, consistent with a thesis that power generation and grid assets become more valuable as AI, EVs and electrification drive baseload demand. The new Freeport‑McMoRan position extends that logic upstream into copper.

The funding leg of this quarter is disciplined profit‑taking in some of the biggest prior‑cycle winners and more speculative edges of their AI book. The standout is Nebius Group: they cut shares by -40.3%, freeing up about $1.07B of exposure from a position still up over 400.0% versus average cost. That looks like a textbook move from single‑name risk into a broader basket of AI infrastructure.

They applied the same playbook to Astera Labs, halving the position by -50.1% after a roughly 202.2% gain, and to Western Digital and Vertiv, where they trimmed -17.1% and -26.6% respectively with 400%+ gains locked in. Broadcom, KLA and Cloudflare all saw smaller reductions, suggesting not a change in thesis but a rebalance away from names where expectations and multiples are hottest.

Outside technology, they lightened up on Eli Lilly by -36.3% after a near‑doubling since purchase, even as they initiated Novo Nordisk. That reads as a relative value and concentration decision inside the GLP‑1 complex rather than a call on obesity drugs per se. Trims in MercadoLibre, Rocket Companies, Welltower and RBC Bearings look more like cash sources: solid winners or capital‑intensive stories funding higher‑conviction AI, health care and infra buys.

Notably, they did not use weakness as an excuse to average down everywhere. Rocket, where they are currently underwater on their average cost, was cut by -22.2%, and they left a loss‑making position like Figure Technology still modest in size despite a 30.4% add. The pattern is clear: they are willing to exit or shrink ideas that don’t plug into their core secular themes, even at a loss.

On paper, Alger is still a tech‑heavy growth shop, with 67.09% of reported assets in technology versus 70.49% last quarter. But that small headline shift hides a meaningful internal rotation: away from idiosyncratic, smaller AI plays and toward a more diversified ecosystem of chips, data, connectivity and real‑world capacity.

Health care weight rose from 6.26% to 7.19% as they added or initiated in Novo Nordisk, Biogen, Johnson & Johnson, Natera, Repligen and UnitedHealth while trimming only modestly in Cardinal Health and Lilly. That mix tilts toward therapeutics with clear demand visibility and diagnostics/tools that benefit from higher biologics volumes, effectively pairing AI‑driven efficiency with the secular growth of aging populations.

Utilities moved from 2.81% to 3.2% on increased Talen and a small cut in GFL, and “unclassified” names like GE Vernova and HEICO — functionally industrials and aerospace — inched up as well. Add in a higher industrials slice (3.84% from 3.67%) via Tesla and RBC plus the new Freeport‑McMoRan stake in basic materials (0.38% from 0.0%), and you get a clear through‑line: more exposure to physical assets that underpin electrification and AI data centers.

Finance, at 2.04% from 1.62%, is being expressed through Robinhood and Figure rather than traditional banks, a bet on capital‑light, fee‑driven platforms. Telecommunications exposure almost doubled from 0.93% to 1.69%, led by the Lumentum surge and a steady Roku stake, tying back into the bandwidth and attention legs of their ecosystem thesis. Real estate is the one area they’re gently backing away from, slipping to 1.0% after trims in Welltower and MercadoLibre.

Taken together, this 13F paints a manager that thinks we’re in the early middle innings of AI — and that the real money is in the infrastructure, not just the headlines. They are content to let large, profitable platforms like NVIDIA, Microsoft, Alphabet, Amazon and Apple carry more than a third of the book, indicating belief that their scale advantages and balance sheets will dominate the AI profit stack.

At the same time, they are actively widening the aperture to what benefits from that stack: accelerators (AMD), memory (Micron), foundries (GlobalFoundries), storage (Seagate), optics (Lumentum), data platforms (Snowflake), and developer infrastructure (Twilio, Cloudflare). The net effect is a portfolio that should participate in AI upside whether the market’s preferred hardware vendor changes or not.

Their incremental adds in GLP‑1s, specialty pharma, med‑tech and managed care suggest they see health care as the second major compounder over this decade — part defensive ballast, part genuine secular growth. The build‑out in power, grid and copper exposure extends that logic to the physical constraints AI and electrification will run into.

If there is a risk embedded here, it is that this remains a highly growth‑skewed, factor‑concentrated book. A sharp derating in long‑duration assets would still hit them hard. But the quarter’s moves show a manager consciously exchanging some of the frothiest, narrow AI bets for a more diversified, cash‑flow‑anchored ecosystem around the same theme — a subtle but important evolution in how they’re underwriting the next leg of returns.