Fred Alger Management has published the fourth-quarter 2025 investor letter for its Alger Spectra Fund. The document is available for download.
The U.S. equity market finished the quarter strongly, with the S&P 500 rising 2.7%. Corporate earnings that exceeded expectations, further interest rate easing from the Federal Reserve, and a resilient macroeconomic environment supported investor optimism. Clarity on trade policy also provided a boost.
During the quarter, the fund's Class A shares did not perform as well as the Russell 3000 Growth Index. The Information Technology and Utilities sectors helped the fund's relative performance, while the Health Care and Communication Services sectors hurt it.
The letter highlighted Microsoft Corporation (NASDAQ:MSFT). Microsoft's one-month return was -5.17%, while its shares gained 7.19% over the past 52 weeks. On January 13, 2026, Microsoft stock closed at $459.86 per share, giving it a market capitalization of $3.418 trillion.
Regarding Microsoft, the fund stated: "Microsoft Corporation (NASDAQ:MSFT) is a beneficiary of corporate America’s transformative digitization. The company operates through three segments: Productivity and Business Processes (Office365, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). Shares detracted during the quarter after the company reported Azure cloud growth and forward guidance fell short of elevated investor expectations, in part because revenue recognition lagged strong demand and the company remained capacity constrained. While Azure still grew 39% year-over-year (YoY) and management guided to 37% growth in the current quarter, we believe investors focused on the near-term mismatch between demand and available capacity. Importantly, demand signals improved: commercial bookings surged (reported up approximately 111% YoY) and remaining performance obligations rose 51% compared to 37% from the prior quarter, extending revenue visibility. To address the backlog and support AI/cloud workloads, management signaled a step-up in investment, including roughly $30B of capital expenditures (CapEx) in the current quarter and an expectation that fiscal-2026 CapEx growth will be higher than fiscal-2025."
In the first quarter of its 2026 fiscal year, Microsoft reported revenue of $77.7 billion, an increase of 18%, or 17% when adjusted for constant currency.