Amdocs (DOX) Fell Despite Delivering Steady Gains

Palm Valley Capital Management, an investment management firm, has released the “Palm Valley Capital Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, Palm Valley Capital Fund appreciated 2.35% compared to a 9.11% gain for the S&P SmallCap 600 and a 7.99% rise in the Morningstar Small Cap Total Return Index. At the start of the quarter, the Fund invested 73.5% in cash equivalents, increasing slightly to 74.1% by the end of the quarter. Small-cap stocks performed ahead of large caps during the period, with the anticipation of Fed easing and reduced concerns about the impact of tariffs on corporate profits. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Palm Valley Capital Fund highlighted stocks such as Amdocs Limited (NASDAQ:DOX). Amdocs Limited (NASDAQ:DOX) is a software and services provider to communications, entertainment, and media service providers. The one-month return of Amdocs Limited (NASDAQ:DOX) was -1.75%, and its shares lost 6.47% of their value over the last 52 weeks. On October 7, 2025, Amdocs Limited (NASDAQ:DOX) stock closed at $82.42 per share, with a market capitalization of $9.066 billion.

Palm Valley Capital Fund stated the following regarding Amdocs Limited (NASDAQ:DOX) in its third quarter 2025 investor letter:

“The Fund had two positions negatively impacting performance by more than 10 basis points in Q3, Flowers Foods (ticker: FLO) and Amdocs Limited (NASDAQ:DOX). Amdocs, which is one of the Fund’s largest positions, posted a modest share price decline in the period despite continuing to deliver steady gains in operating income. Investors less familiar with the company may be confused by recent decreases in the top line, which stemmed from an intentional disposition of certain no-margin, non-core businesses. Our valuation for Amdocs has increased reliably over the years. Due to the company’s operating stability, excellent balance sheet, and strong competitive position in helping its customers modernize their networks, we assign the shares an above average valuation multiple.”

Amdocs (DOX) Expands AI-Powered Telecom Solutions with NVIDIA and AWS

Amdocs Limited (NASDAQ:DOX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 34 hedge fund portfolios held Amdocs Limited (NASDAQ:DOX) at the end of the second quarter, up from 27 in the previous quarter. While we acknowledge the risk and potential of Amdocs Limited (NASDAQ:DOX) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Amdocs Limited (NASDAQ:DOX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Amdocs Limited (NASDAQ:DOX) and shared the list of cheap AI stocks to buy. In addition, please check out our hedge fund investor letters Q3 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.