Do You Believe in the Growth Potential of Shake Shack (SHAK)?

Wasatch Global Investors, an asset management company, released its third-quarter 2025 “Wasatch Small Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. US small-cap equities rallied strongly in the third quarter. The Fed Reserve’s interest rate cut supported the rally. However, the fund-Investor Class struggled to keep up with the rally and ended the period down -3.17% vs. 12.19% gain for the Russell 2000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Wasatch Small Cap Growth Strategy highlighted stocks such as Shake Shack Inc. (NYSE:SHAK). Shake Shack Inc. (NYSE:SHAK) owns, operates, and licenses Shake Shack restaurants. The one-month return of Shake Shack Inc. (NYSE:SHAK) was -4.53%, and its shares lost 36.80% of their value over the last 52 weeks. On December 12, 2025, Shake Shack Inc. (NYSE:SHAK) stock closed at $83.16 per share, with a market capitalization of $3.55 billion.

Wasatch Small Cap Growth Strategy stated the following regarding Shake Shack Inc. (NYSE:SHAK) in its third quarter 2025 investor letter:

“Shake Shack Inc. (NYSE:SHAK) also detracted. The fast-casual restaurant chain is best known for its premium burgers and milkshakes. In our view, fundamentals for the company remain strong. But the stocks of most restaurant companies were down in the quarter. We believe this is due to concern about potential weakness in consumer spending. However, we continue to like the company. Shake Shack’s higher-end burger concept appears to be resonating with consumers, and we like the runway for growth as it expands its national footprint. Unit economics associated with new restaurants are quite attractive, in our view, and we support management’s expansion plans.”

Shake Shack Inc. (SHAK): It's Not Expensive At All, Sayd Jim Cramer

Shake Shack Inc. (NYSE:SHAK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 33 hedge fund portfolios held Shake Shack Inc. (NYSE:SHAK) at the end of the third quarter, compared to 34 in the previous quarter. Shake Shack Inc. (NYSE:SHAK) reported total revenue of $367.4 million in the third quarter of 2025, marking 15.9% year-over-year increase. While we acknowledge the risk and potential of Shake Shack Inc. (NYSE:SHAK) 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 Shake Shack Inc. (NYSE:SHAK) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Shake Shack Inc. (NYSE:SHAK) 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.