Fred Alger Managementan investment management company, published its Q4 2025 investor letter “Alger Small Cap Focus Fund.” A copy of the letter can be downloaded here. The US stock market ended the fourth quarter on a strong note, with the S&P rising 2.7%, maintaining its steady bullish momentum. Investor optimism was supported by better-than-expected corporate earnings, the U.S. Federal Reserve’s more easing interest rate stance, and a resilient macroeconomic backdrop. Improving trade policy clarity provided additional support. Meanwhile, the quarter was characterized by increasing divergence below the surface level of the index. AI investment enthusiasm faces growing doubts due to bottlenecks, financial challenges and uncertainty over its ability to generate returns. The firm continues to observe secular trends that present attractive investment opportunities for small-cap stocks. In the fourth quarter of 2025, the Fund’s Class A shares outperformed the Russell 2000 Growth Index. The utilities and financial sectors contributed to the Fund’s relative performance in the quarter, while the consumer discretionary and information technology sectors detracted from performance. Plus, check out the fund’s top five holdings to learn your best picks in 2025.
In its Q4 2025 investor letter, Alger Small Cap Focus Fund highlighted stocks like Nebius Group NV (NASDAQ:NBIS). Nebius Group NV (NASDAQ:NBIS) is a technology company based in Amsterdam, Netherlands. Nebius Group NV (NASDAQ:NBIS)’s monthly return was 16.63% and its shares gained 201.69% of its value in the last 52 weeks. On January 16, 2026, Nebius Group NV (NASDAQ:NBIS) stock closed at $108.73 per share, with a market capitalization of $27.379 billion.
Alger Small Cap Focus Fund stated the following regarding Nebius Group NV (NASDAQ:NBIS) in its Q4 2025 investor letter:
“Nebius NV Group (NASDAQ:NBIS) is an AI-focused cloud infrastructure provider, operating GPU computing capacity across Europe and expanding in the U.S. We see the company as a distinct beneficiary of the “neocloud” of accelerating AI adoption, as demand for high-quality GPU computing continues to outpace the available supply of chips, power and data center capacity. Nebius already operates its own data center in Finland and has deployed GPU capacity in Paris, while adding capacity in the US through a deployment in Kansas City, Missouri and the construction of a new data center in New Jersey. During the quarter, shares detracted amid a broader sell-off in AI infrastructure-related stocks as investors became more concerned about the “circularity” of AI ecosystem funding and the durability of AI infrastructure spending. “Despite near-term volatility, Nebius continues to sign large long-term deals with blue-chip customers, including multi-year AI infrastructure contracts with leading cloud service providers, improving revenue visibility as new capacity comes online.”
