Artisan Partners, an investment management company, released its “Artisan Mid Cap Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund’s Investor Class fund ARTQX returned 0.97%, Advisor Class fund APDQX posted a return of 0.98%, and Institutional Class fund APHQX returned 0.97%, compared to a 6.18% return for the Russell Midcap Value Index. Equity markets continued their rally in the third quarter as investors overlooked tariff concerns, driven by strong corporate earnings, rising AI capital expenditures, and hopes for economic support from US fiscal policy and lower interest rates. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Artisan Mid Cap Value Fund highlighted stocks such as Align Technology, Inc. (NASDAQ:ALGN). Align Technology, Inc. (NASDAQ:ALGN) designs, manufactures, and markets Invisalign clear aligners and iTero intraoral scanners and services. The one-month return of Align Technology, Inc. (NASDAQ:ALGN) was -1.05%, and its shares lost 28.71% of their value over the last 52 weeks. On January 2, 2026, Align Technology, Inc. (NASDAQ:ALGN) stock closed at $156.03 per share, with a market capitalization of $11.31 billion.
Artisan Mid Cap Value Fund stated the following regarding Align Technology, Inc. (NASDAQ:ALGN) in its third quarter 2025 investor letter:
“In Q3, the portfolio’s stock selection was broadly negative across sectors, reflective of the broader performance headwinds discussed earlier, but our biggest source of underperformance was the health care sector, which had three of our four biggest detractors. These included Centene, Align Technology, Inc. (NASDAQ:ALGN) and Baxter International. Health care has been one of the worst-performing sectors over the past year as policy uncertainty has caused it to be shunned. Align Technology is a medical device company known for its Invisalign clear aligners used in orthodontics. The company’s quarterly results were a little lighter than expected, but the stock sold off sharply as expectations coming into the release may have been high due to management’s prior upbeat tone. We purchased Align Technology on April 4—two days after Liberation Day tariffs caused equity markets to sell off. The market turmoil gave us an opportunity to add what we believe is a high-quality business with a bright future at a reasonable price. We initiated our position at $150 per share. It was selling for over $300 as recently as April 2024 and for more than $700 when Align Technology was seen as “COVIDwinner” during its hyper-growth phase in 2021. Align Technology is a case of a former growth darling that lost its luster when growth decelerated. Invisalign is the market leader in clear aligners, the alternative to traditional braces. The pull forward during COVID dampened subsequent revenue trends, and higher consumer financing costs have been an additional headwind to sales. More recent concerns center around emerging low-end competition and falling consumer confidence, particularly as recession risks have increased. We don’t have a strong view on near-term growth inflecting higher, but longer term, we believe clear aligners, which are just ~20% of the more than 20 million new orthodontia cases annually, can continue to take share. Invisalign is a premium brand that orthodontists trust, so we see less risk from new entrants that compete mainly on price.”
Align Technology, Inc. (NASDAQ:ALGN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held Align Technology, Inc. (NASDAQ:ALGN) at the end of the third quarter, which was 54 in the previous quarter. In Q3 2025, Align Technology, Inc. (NASDAQ:ALGN) reported revenue of $995.7 million, down 1.7% from the prior quarter and up 1.8% from the corresponding quarter a year ago. While we acknowledge the risk and potential of Align Technology, Inc. (NASDAQ:ALGN) 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 Align Technology, Inc. (NASDAQ:ALGN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Align Technology, Inc. (NASDAQ:ALGN) and shared the list of stocks Jim Cramer discussed. 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.
