Immersion Investment Partners, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund gained 18.4% in the third quarter, outperforming the Russell 2000 Index’s 12.4% increase and the Russell Microcap Index’s 17.03% return. The firm invested over 54% of net asset value in its top three names. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its third-quarter 2025 investor letter, Immersion Investment Partners highlighted stocks such as Celsius Holdings, Inc. (NASDAQ:CELH). Celsius Holdings, Inc. (NASDAQ:CELH) develops, markets, and distributes functional drinks and liquid supplements. The one-month return of Celsius Holdings, Inc. (NASDAQ:CELH) was 2.44%, and its shares gained 91.01% of their value over the last 52 weeks. On October 30, 2025, Celsius Holdings, Inc. (NASDAQ:CELH) stock closed at $60.13 per share, with a market capitalization of $15.501 billion.
Immersion Investment Partners stated the following regarding Celsius Holdings, Inc. (NASDAQ:CELH) in its third quarter 2025 investor letter:
“At the end of August, Celsius Holdings, Inc. (NASDAQ:CELH) – Doubted Champion) announced an agreement covering a series of actions to strengthen their partnership with PepsiCo. As part of the agreement, Alani Nu, which was acquired by Celsius in February for $1.8 billion, would move 100% of its North American distribution to Pepsi at the end of 2025. Pepsi also gave Rockstar Energy to Celsius and wrote them a $585 million check (receiving convertible 5% preferred shares in exchange), taking Pepsi’s ownership of Celsius to over 10%. Most importantly, Pepsi handed over full control of energy drink distribution to Celsius, meaning that Celsius has final say on what goes on Pepsi trucks and how it gets displayed on shelves. Our view is that this will dramatically improve Celsius’ and Alani’s market share almost immediately. Pepsi couldn’t intentionally cannibalize Rockstar (the CEO of Pepsi who signed off on acquiring Rockstar in 2020 for nearly $4 billion is still in charge) due to the optics of publicly admitting failure. Instead of killing it themselves, Pepsi basically gave Celsius permission to put the aging Rockstar in hospice. Due to Celsius’ and Alani’s dramatically faster shelf velocity vs. Rockstar, any shelf space reallocated to the former is likely to result in significantly higher sales. Additionally, Alani’s move to the Pepsi distribution system could double sales over the next year, assuming distribution gains similar to what Celsius experienced when it switched to the Pepsi system and holding shelf velocity constant. We consider the amended Celsius/Pepsi agreement as highly favorable to Celsius and will result in accelerating sales and earnings growth over the next year, however, the stock hasn’t really reflected this improvement, trading at similar EV/Sales and EV/EBITDA multiples to Monster, which commands a significantly slower growth outlook. To put an even finer point on it, we expect that the Alani brand, by itself, can generate $300mm in adjusted EBITDA growth in 2026. This implies that the street is a full year behind and that 2027 numbers for Celsius Holdings (Adj. EBITDA of $843mm) can be met in 2026. This exercise does not include further Celsius brand improvements. When this growth outlook becomes obvious, we consider the stock capable of regaining Spring 2024 highs.”
Celsius Holdings, Inc. (NASDAQ:CELH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 52 hedge fund portfolios held Celsius Holdings, Inc. (NASDAQ:CELH) at the end of the second quarter, up from 47 in the previous quarter. While we acknowledge the risk and potential of Celsius Holdings, Inc. (NASDAQ:CELH) 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 Celsius Holdings, Inc. (NASDAQ:CELH) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Celsius Holdings, Inc. (NASDAQ:CELH) and shared the list of stocks that should double in 3 years. 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.
