Diamond Hill Mid Cap Strategy Sold Informatica (INFA) in Q1. Here’s Why

Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” investor letter for the first quarter of 2025. A copy of the letter can be downloaded here. The first quarter of 2025 was mixed due to a flurry of activity from the new presidential administration. However, the strategy outperformed the Russell Midcap Index in Q1, returning -1.26% (net) vs -3.40% for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its first-quarter 2025 investor letter, Diamond Hill Mid Cap Strategy highlighted stocks such as Informatica Inc. (NYSE:INFA). Informatica Inc. (NYSE:INFA) engages in the development of an artificial intelligence-powered platform. The one-month return of Informatica Inc. (NYSE:INFA) was 27.09%, and its shares lost 15.55% of their value over the last 52 weeks. On June 5, 2025, Informatica Inc. (NYSE:INFA) stock closed at $24.16 per share, with a market capitalization of $7.331 billion.

Diamond Hill Mid Cap Strategy stated the following regarding Informatica Inc. (NYSE:INFA) in its Q1 2025 investor letter:

“We also exited our position in Informatica Inc. (NYSE:INFA), a comprehensive data management software company providing an array of solutions that facilitate monitoring, manipulating and moving data assets at large enterprises. Following Q4, we had serious questions about management’s ability to execute Informatica’s cloud model transition, as well as about the underlying strength of the business’s installed base. We consequently sold our position to reallocate our capital to names in which we have greater fundamental conviction.”

Informatica (INFA) Unveils New AI Tools at Snowflake Summit 2025

A business executive in a modern office looking over reports detailing artificial intelligence.

Informatica Inc. (NYSE:INFA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Informatica Inc. (NYSE:INFA) at the end of the first quarter, which was 32 in the previous quarter. While we acknowledge the potential of Informatica Inc. (NYSE:INFA) 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 Informatica Inc. (NYSE:INFA) and shared the list of trending AI stocks on Wall Street. 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.