Loomis Sayles, an investment management company, released its “Global Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund returned -3.35% compared to -1.32% for the MSCI ACWI Net Index. Stock selection in consumer staples, communication services, and healthcare sectors, and allocations to the information technology and healthcare sectors positively impacted the fund’s relative performance. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Loomis Sayles Global Growth Fund highlighted stocks such as Tesla, Inc. (NASDAQ:TSLA). Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, as well as energy generation and storage systems. The one-month return of Tesla, Inc. (NASDAQ:TSLA) was 18.70%, and its shares gained 89.32% of their value over the last 52 weeks. On May 23, 2025, Tesla, Inc. (NASDAQ:TSLA) stock closed at $339.34 per share with a market capitalization of $1.09 trillion.
Loomis Sayles Global Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2025 investor letter:
“Founded in 2003, Tesla, Inc. (NASDAQ:TSLA) is a global leader in the design, manufacturing, and sales of high performance fully electric (battery) vehicles (EVs). The company’s automotive unit sells its products directly to customers through its website and retail locations and continues to grow its customer-facing infrastructure through a global network of vehicle service centers, mobile service technicians, body shops, Supercharger stations, and Destination Chargers to accelerate widespread adoption of its products. Tesla also designs, manufactures, sells, and installs solar energy generation and energy storage products to residential, commercial, and industrial clients through its energy generation and storage unit. The company generated approximately 90% of its sales from its automotive segment and 10% from its energy generation and storage segment in its 2024 fiscal year. From a geographic standpoint, the US and China are the company’s two largest markets and accounted for approximately 49% and 21% of 2024 sales, respectively, while the rest of the world collectively accounts for approximately 30%.
A fund holding since the first quarter of 2022, Tesla shares declined during the quarter, after appreciating 60% in the fourth quarter following the US election results in which CEO Elon Musk publicly supported President Trump. We believe the election results, which have no impact on our long-term structural investment thesis for the company, brought renewed focus on full-self driving (FSD) and other software opportunities for Tesla. Tesla’s monetization of its growing installed base of vehicles through software sales, primarily FSD, has always been a key aspect of our investment thesis. More recently, Musk’s greater involvement in US and global politics is thought to have brought negative attention to the brand, which is believed to be one of the primary drivers for current share price weakness. While we believe this could be impacting some sales, we believe the greater impact to current sales is customers awaiting the full availability of the new model Y, which is Tesla’s most popular vehicle. Despite this near-term uncertainty, we believe the concurrent pullback in EV investments by many traditional auto manufacturers will enable Tesla to extend its product and technology advantages, driving even further differentiation as consumers consider the full suite of Tesla products, including new models anticipated in 2025. There is no change to our long-term structural investment thesis for Tesla, which continues to trade at a significant discount to our estimate of intrinsic value…” (Click here to read the full text)
Tesla, Inc. (NASDAQ:TSLA) is in 23rd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the first quarter, which was 126 in the previous quarter. While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) 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 Tesla, Inc. (NASDAQ:TSLA) and shared the list of AI stocks on latest news and ratings. Baron Focused Growth Fund also talked about Tesla, Inc. (NASDAQ:TSLA) in its Q1 2025 investor letter. 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.
