APA Corporation (APA) Slid on Concerns Over Poor Investor Sentiment

Ariel Investments, an investment management company, released its “Ariel Focus Fund” second-quarter investor letter.  A copy of the letter can be downloaded here. The second quarter of 2025 saw a period of extremes. Despite an initial market sell-off caused by the “Liberation Day” tariff announcement, the stock market recovered, supported by renewed interest in AI-related stocks, strong economic data, and solid corporate earnings. In the environment, the fund returned +4.75%, outperforming the Russell 1000 Value Index’s +3.79% gain but lagging behind the S&P 500 Index’s +10.94% return. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, Ariel Focus Fund highlighted stocks such as APA Corporation (NASDAQ:APA). APA Corporation (NASDAQ:APA) engages in oil and natural gas exploration, development, and production. The one-month return of APA Corporation (NASDAQ:APA) was 2.34%, and its shares lost 39.81% of their value over the last 52 weeks. On July 18, 2025, APA Corporation (NASDAQ:APA) stock closed at $18.82 per share, with a market capitalization of $6.791 billion.

Ariel Focus Fund stated the following regarding APA Corporation (NASDAQ:APA) in its second quarter 2025 investor letter:

“Oil and natural gas explorer, APA Corporation (NASDAQ:APA) also detracted from relative performance in the quarter amid poor investor sentiment across the energy sector due to concerns of slowing global growth. The company continues to execute on its cost reduction plan and announced the divestiture of its Permian Basic assets in New Mexico to paydown debt. Management remains laser-focused on increasing the operational efficiency of the Callon assets, free cash flow generation and returning capital to shareholders. We believe the company trades at a significant discount to its intrinsic value.”

Why Imperial Oil is a Top Dividend Pick in the Canadian Energy Sector

Workers in hard hats and safety gear processing oil and gas in a US refinery.

APA Corporation (NASDAQ:APA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held APA Corporation (NASDAQ:APA) at the end of the first quarter, compared to 34 in the previous quarter. While we acknowledge the risk and potential of APA Corporation (NASDAQ:APA) 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 APA Corporation (NASDAQ:APA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered APA Corporation (NASDAQ:APA) and shared the list of the top-performing stocks of the day Jim Cramer highlighted within the S&P 500. In addition, please check out our hedge fund investor letters Q2 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.