Sustainable Growth Advisers (SGA), an investment management company, released its fourth-quarter investor letter for its “U.S. Large Cap Growth Strategy.” A copy of the letter can be downloaded here. In Q4 2025, the Portfolio returned 0.3% (Gross) and 0.2% (Net) compared to 1.1% return for the Russell 1000 Growth Index and 2.7% gain for the S&P 500 Index. Rising volatility, coupled with broadening market leadership, improved the portfolio’s relative performance in the second half of the quarter. In 2025, the Portfolio faced its most challenging years since the firm’s inception in 2003. After a challenging year, the firm is encouraged by the robust growth potential in its portfolio and its historically attractive relative valuation. Progressing further, the portfolio is well-positioned to gain from a shift away from high momentum dynamics in U.S. markets and a broadening of market leadership. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, SGA U.S. Large Cap Growth Strategy highlighted stocks like Broadcom Inc. (NASDAQ:AVGO). The strategy established a position in Broadcom Inc. (NASDAQ:AVGO), a leading semiconductor and infrastructure software solutions company, during the quarter. On February 10, 2026, Broadcom Inc. (NASDAQ:AVGO) stock closed at $340.44 per share. One-month return of Broadcom Inc. (NASDAQ:AVGO) was 0.16%, and its shares are up 44.04% over the past twelve months. Broadcom Inc. (NASDAQ:AVGO) has a market capitalization of $1.614 trillion.
SGA U.S. Large Cap Growth Strategy stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its fourth quarter 2025 investor letter:
“During the quarter, we initiated a below-average weight position in leading semiconductor and infrastructure software company Broadcom Inc. (NASDAQ:AVGO). Broadcom’s ongoing transformation from a provider of custom ASICs to a full rack-scale solutions vendor, including scale-up networking, marks a significant improvement in its strategic positioning compared to earlier in the year. This strategic evolution has been validated by recent product launches, such as the Scale-up Ethernet solution, and committed orders from major customers like Anthropic. Broadcom is also diversifying its customer base, expanding from three to five qualified customers with purchase commitments, and accelerating production volume timelines for future prospective clients. The shift in AI demand from training to inferencing is creating more visible and stable revenue streams, as inferencing workloads have grown rapidly, driven by innovations in long context windows and agentic workloads.
Broadcom Inc. (NASDAQ:AVGO) is in 12th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 183 hedge fund portfolios held Broadcom Inc. (NASDAQ:AVGO) at the end of the third quarter, up from 156 in the previous quarter. While we acknowledge the potential of Broadcom Inc. (NASDAQ:AVGO) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered Broadcom Inc. (NASDAQ:AVGO) and shared the list of best performing S&P 500 stocks in the last 5 years. In addition, please check out our hedge fund investor letters Q4 2025 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.
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