Block (XYZ) Slid as the Guidance Fell Short of Expectations

Sands Capital, an investment management company, released its “Sands Capital Global Growth Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global Growth adopts a flexible approach to identify the most promising growth companies across the globe. Global equities fell in the first quarter, as per the MSCI ACWI. The strategy underperformed the benchmark amid the weakness. 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 Global Growth Fund highlighted stocks such as Block, Inc. (NYSE:XYZ). Block, Inc. (NYSE:XYZ) is a technology company that focuses on commerce and financial products and services. The one-month return of Block, Inc. (NYSE:XYZ) was 26.29%, and its shares lost 2.30% of their value over the last 52 weeks. On June 5, 2025, Block, Inc. (NYSE:XYZ) stock closed at $63.60 per share with a market capitalization of $39.115 billion.

Sands Capital Global Growth Fund stated the following regarding Block, Inc. (NYSE:XYZ) in its Q1 2025 investor letter:

“Block, Inc. (NYSE:XYZ) is a digital financial services pioneer and enabler of financial inclusion. The business disappointed investors with lighter-than-expected first-quarter 2025 guidance. We are reassessing Block’s fit with our criteria following significant poor execution in Square, which allowed competitors to establish positions with point-of-sale. While Block has since improved its product and go-to-market strategy, it’s unclear if these changes will regain momentum or if they arrived too late. Cash App remains stronger but faces challenges transitioning from peer-to-peer to full-service banking. Product cadence has slowed, possibly due to execution, regulatory focus, or business maturity. While Block has restructured operations and has significant potential growth drivers (e.g., AfterPay on the Cash Card, Cash App Borrow), we’re carefully evaluating whether the business is at a turning point.”

Block, Inc. (NYSE:XYZ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 76 hedge fund portfolios held Block, Inc. (NYSE:XYZ) at the end of the first quarter which was 81 in the previous quarter. While we acknowledge the potential of Block, Inc. (NYSE:XYZ) 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 Block, Inc. (NYSE:XYZ) and shared Baron FinTech Fund’s views on the company. 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.