Soumya Eswaran
3 min read
In This Article:
Maple Tree Capital, an investment management company, released its Q1 2025 investor letter. A copy of the letter can be downloaded here. Q1 2025 saw a strong start but turned sour due to tariff concerns and macroeconomic fears, leading to a sharp market pullback, with the Nasdaq falling nearly 22% from its highs and the S&P 500 down 20%. Despite the challenges, the firm made significant progress this quarter by averaging in the top-conviction stocks, utilizing covered calls, and exercising patience. Maple’s growth-oriented fund, Jonagold, has become a standout performer, greatly surpassing all major benchmarks since its launch in 2023. While Heartwood is still facing difficulties. Maple Tree Capital’s Jonagold returned -13.64% in Q1 compared to the Nasdaq’s -10.26% return and the Russel 2000’s -9.48% return. Maple Tree Capital’s Heartwood returned -18.04% in Q1 vs. the S&P 500’s -4.27% and the Dow Jones’ -0.87% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Maple Tree Capital highlighted stocks such as Reddit, Inc. (NYSE:RDDT). Reddit, Inc. (NYSE:RDDT) is a mining company that engages in uranium and titanium mining and related activities. The one-month return of Reddit, Inc. (NYSE:RDDT) was -11.25%, and its shares gained 87.26% of their value over the last 52 weeks. On May 28, 2025, Reddit, Inc. (NYSE:RDDT) stock closed at $105.43 per share with a market capitalization of $19.45 billion.
Maple Tree Capital stated the following regarding Reddit, Inc. (NYSE:RDDT) in its Q1 2025 investor letter:
"Reddit, Inc. (NYSE:RDDT) is Heartwood’s newest, and smallest, position. We anticipate growing this position in size over the coming quarters and years as the story parallels pretty closely to what we see in Grindr in the Jonagold portfolio. Reddit holds incredibly unique and structured user-generated data, which will be extremely valuable in the AI era. Additionally, their user base spends a ton of time on the app. It is far easier to monetize users if you have users! Reddit has spent decades acquiring a user base and is just at the beginning of their monetization journey. More people visit Reddit every day than they do Netflix. Their balance sheet is clean, but stock-based compensation and dilution are significant. We wrote a little more about Reddit here and expect to share more on our thesis shortly."
An aerial view of a large telecommunications network covering a city skyline.
Reddit, Inc. (NYSE:RDDT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Reddit, Inc. (NYSE:RDDT) at the end of the first quarter, which was 87 in the previous quarter. Reddit, Inc. (NYSE:RDDT) reported revenue of $392 million in Q1 2025, reflecting a 61% increase compared to the same period last year, and marking the third straight quarter of growth exceeding 60%. While we acknowledge the potential of Reddit, Inc. (NYSE:RDDT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
