Should You be Confident in DoorDash's (DASH) Long-Term Earnings Power?

Sands Capital, an investment management company, released its “Sands Capital Technology Innovators Fund” Q1 2025 investor letter. A copy of the letter can be downloaded here. Technology Innovators focus on pioneering businesses worldwide that serve as key drivers or beneficiaries of significant long-term changes driven by technology. The fund returned -10.4% (net) in the first quarter compared to a 9.4% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. The choice of securities in the software sector was the primary factor negatively impacting relative performance. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its first-quarter 2025 investor letter, Sands Capital Technology Innovators Fund highlighted stocks such as DoorDash, Inc. (NASDAQ:DASH). DoorDash, Inc. (NASDAQ:DASH) is a commerce platform that connects merchants, consumers, and independent contractors. The one-month return of DoorDash, Inc. (NASDAQ:DASH) was 6.22%, and its shares gained 83.36% of their value over the last 52 weeks. On May 27, 2025, DoorDash, Inc. (NASDAQ:DASH) stock closed at $204.89 per share with a market capitalization of $86.82 billion.

Sands Capital Technology Innovators Fund stated the following regarding DoorDash, Inc. (NASDAQ:DASH) in its Q1 2025 investor letter:

"DoorDash, Inc. (NASDAQ:DASH) is the leading food delivery platform in the United States by market share. The business exceeded investor expectations in its most recently reported quarter, demonstrating continued strong execution. Orders grew 19 percent year-over-year, supported by 14 percent growth in monthly active users, while adjusted EBITDA rose 56 percent. First-quarter 2025 guidance was better than consensus expected, calling for 20 percent gross order volume growth. Our investment case continues to play out, and we continue to believe that consensus underestimates DoorDash’s longer-term earnings power."

DoorDash, Inc. (NASDAQ:DASH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 81 hedge fund portfolios held DoorDash, Inc. (NASDAQ:DASH) at the end of the first quarter, which was 88 in the previous quarter. While we acknowledge the potential of DoorDash, Inc. (NASDAQ:DASH) 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.

In another article, we covered DoorDash, Inc. (NASDAQ:DASH) and shared Jim Cramer’s successful stock predictions. Artisan Mid Cap Fund initiated a position in DoorDash, Inc. (NASDAQ:DASH) in Q1 2025. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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