Among The High Growth Companies Hedge Funds Are Buying

We recently published a list of 15 High Growth Companies Hedge Funds Are Buying. In this article, we are going to take a look at where Sea Limited (NYSE:SE) stands against other high growth stocks.

The global economy in 2025 is expected to face modest growth amid ongoing challenges, with projections for US GDP at 2%, the Eurozone at 0.9%, and China at 4.2%. Inflation is likely to remain high because of increasing fiscal spending and potential tariffs, and central banks may have limited room to cut rates, leading to uncertain markets and possible volatility. However, rising productivity driven by AI and other emerging technologies offers long-term promise. The US is expected to benefit the most from these gains, while Europe may lag behind due to slower investment and tech adoption.

According to Deutsche Bank Wealth Management, policy is shifting from monetary to fiscal, with countries like China expected to launch growth initiatives. Equities, particularly American stocks, are favored by investors, supported by profit growth and favorable policy expectations. Bond markets and commodities also offer opportunities, and infrastructure investment is considered a long-term growth area. Similarly, despite the current market uncertainty, BlackRock believes there is reason to stay optimistic about developed market stocks in the next 6 to 12 months. American Treasuries, which used to act as a safety net when stocks dropped, have not offered the same protection lately. In addition, the dollar lost ground in recent selloffs, which is unusual. As a result, some investors are turning to alternatives like gold, which has hit record highs. The rise of AI is also reshaping the market, creating more concentration in a few big tech names. That can strengthen returns, but it also raises risks. Private capital is in demand too, though higher interest rates may weigh on future returns there.

As markets get more unpredictable, many investors are starting to follow hedge funds, hoping they can repeat last year’s strong returns and stay ahead of the curve. In 2024, hedge funds posted remarkable performance, leveraging the volatility and policy shifts in the markets. The average return through November was 10.7%, which is a significant improvement over the 5.7% return for the same period in 2023. This uptick was supported by market turbulence, changes in central bank policies, and the uncertainty surrounding the American presidential election. Notably, some hedge funds saw spectacular gains, such as Light Street Capital’s long/short tech fund skyrocketing 59.4%, while Discovery Capital, a macro-focused fund, posted a 52% return. Bridgewater’s Pure Alpha fund gained 11%, and Marshall Wace, a major British hedge fund, saw impressive returns across several of its funds, including a 14% return in its Eureka fund. Multi-strategy funds like Citadel and Millennium also performed well.

With that outlook in mind, let’s take a look at the top high growth companies that hedge funds are investing in.

Sea Limited (SE): Among The High Growth Companies Hedge Funds Are Buying

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For this article, we used the Finviz screener and filtered out stocks with 5-year revenue growth of over 20%, verifying this information from additional sources. We picked the 15 stocks with the highest hedge fund sentiment to compile this list, taking data from Insider Monkey’s database of Q4 2024. We ranked the list from least to most hedge fund holders.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Number of Hedge Fund Holders: 86

Average 5-Year Revenue Growth: 68.66%

Sea Limited (NYSE:SE) is a consumer internet company that operates through three segments: e-commerce, digital financial services, and digital entertainment. It runs Shopee, a popular e-commerce platform, Garena, a gaming and eSports platform, and SeaMoney, which offers digital financial services. Sea Limited (NYSE:SE) is one of the best high growth stocks to monitor, with an average 5-year revenue growth of nearly 69%.

On April 17, JPMorgan analysts downgraded Sea Limited (NYSE:SE) from Overweight to Neutral and trimmed the price target from $160 to $135. JPMorgan has revised its outlook on Sea, cutting its 2025/26 EBITDA forecasts by 5%. The downgrade stems from softer growth expectations in the e-commerce segment, prompting a reduction in adjusted EBITDA by 18% for 2025 and 11% for 2026. Fintech estimates were also trimmed slightly, while the gaming segment saw a modest bump in projections.

In 2024, Sea Limited (NYSE:SE) experienced double digit growth and positive adjusted EBITDA across all three business segments: e-commerce, fintech, and gaming. Shopee, its e-commerce platform, topped $100 billion in GMV and was profitable in both Asia and Brazil. Sea expects Shopee to grow another 20% in 2025 while continuing to improve profitability. In fintech, Sea’s loan book grew over 60% year-over-year to surpass $5 billion, making it one of Southeast Asia’s biggest consumer lenders. Garena, Sea’s gaming unit, saw a huge comeback with Free Fire, with 34% growth in annual bookings. The company now expects both its user base and bookings to continue growing by double digits in 2025.

According to Insider Monkey’s fourth quarter database, 86 hedge funds were long Sea Limited (NYSE:SE), up from 58 funds in the prior quarter. Tiger Global Management was the top stakeholder of the company, with 16 million shares valued at $1.70 billion.

Overall, SE ranks 11th among the high growth companies hedge funds are buying. While we acknowledge the potential of SE 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 time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SE but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

Disclosure: None. This article is originally published at Insider Monkey.

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