Fred Alger Management has published the Alger Spectra Fund's investor letter for the fourth quarter of 2025. The U.S. equity market finished the quarter strongly, with the S&P 500 rising 2.7%. Corporate earnings that exceeded expectations, the Federal Reserve's continued easing of interest rates, and a resilient macroeconomic environment supported investor optimism. Trade policy developments provided further encouragement.
Beneath the index level, performance varied widely. Artificial intelligence remains a significant market driver but is facing scrutiny over funding, limitations, and investment returns. The firm notes ongoing secular trends that offer investment opportunities. U.S. business spending is increasing, driven by demand for AI infrastructure and tax incentives from legislation.
During the quarter, the fund's Class A shares did not match the performance of the Russell 3000 Growth Index. The Information Technology and Utilities sectors aided relative performance, while Health Care and Communication Services sectors hurt it.
The letter identified Meta Platforms, Inc. as a primary detractor from performance. Meta Platforms stock closed at $620.25 per share on January 16, 2026. Its one-month return was -6.24%, though it gained 1.22% over the past 52 weeks. The company's market capitalization is $1.56 trillion.
Regarding Meta Platforms, the fund stated in the letter: "Meta Platforms, Inc. is the world’s largest social-media company, operating platforms that include Facebook, Instagram, WhatsApp, and Messenger. Shares detracted during the quarter as investors focused on management’s guidance for materially higher operating expenses and capital expenditures tied to AI infrastructure investments. Management noted that 2026 CapEx is expected to be ‘notably’ higher than 2025, which pressured forward earnings and free-cash-flow expectations despite strong underlying results. While the company highlighted continued advertising momentum and indicated that revenue growth could remain robust into year-end, investors remained concerned about the magnitude and timing of the AI-related CapEx."