Here’s How an Underweight Exposure to Tesla (TSLA) Impacted Aristotle Atlantic’s Large Cap Growth Strategy

Aristotle Atlantic Partners, LLC, an investment advisor, released its “Large Cap Growth Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the US equity market rallied, with the S&P 500 Index reaching 8.12%. Bonds also finished higher in the period, with the Bloomberg U.S. Aggregate Bond Index increasing 2.03%. The letter discussed market review, quarterly performance, and attribution analysis. Aristotle Atlantic’s Large Cap Growth strategy returned 9.76% gross of fees (9.61% net of fees) compared to 10.51% return of the Russell 1000 Growth Index. Security selection led to the relative underperformance of the fund in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Aristotle Atlantic Large Cap Growth Strategy 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 -9.63%, and its shares gained 19.37% of their value over the last 52 weeks. On November 14, 2025, Tesla, Inc. (NASDAQ:TSLA) stock closed at $404.35 per share, with a market capitalization of $1.345 trillion.

Aristotle Atlantic Large Cap Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its third quarter 2025 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) detracted from performance in the third quarter. The strategy’s underweight relative to the benchmark was the reason for the negative impact on relative return, as the stock performed well in third quarter. In late July Tesla reported a 23% decline in earnings for the second quarter of 2025 which was worse than consensus estimates. While the CEO had previously forecasted difficult future quarters, third quarter sales of electric vehicles were better than expected as consumers took advantage of tax credits that expired on September 30th. Despite three years of deteriorating fundamentals in the auto business, the narrative on the investment in Tesla has shifted to the expected widespread adoption of robotaxis and the launch of a humanoid robotics company in the future.”

Tesla, Inc (TSLA)'s "No Longer A Car Company,' Says Jim Cramer

Tesla, Inc. (NASDAQ:TSLA) is in the 23rd position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 115 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the second quarter, up from 104 in the previous quarter. While we acknowledge the risk and potential of Tesla, Inc. (NASDAQ:TSLA) 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 Tesla, Inc. (NASDAQ:TSLA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Tesla, Inc. (NASDAQ:TSLA) and shared the list of AI stocks investors are watching. In its Q3 2025 investor letter, Baron Fund highlighted that Tesla, Inc. (NASDAQ:TSLA) rose in the quarter due to the strength of its automotive business, increased investor confidence, and rapid advancements in its AI initiatives. 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.