Here’s What Boosted CVS Health Corporation (CVS) in Q1

PGIM Jennison Health Sciences Fund released its first quarter 2025 investor letter. A copy of the letter can be downloaded here. The S&P 1500 Health Care Index returned 5.5% in the first quarter, outperforming the S&P 500’s -4.3% return. Biotechnology and healthcare providers and services surpassed the Index in performance during this quarter. Pharmaceuticals, healthcare technology, and medtech also saw gains but lagged the Index. Conversely, life sciences tools and services declined over the same period. During the quarter, the Fund experienced a loss in value, underperforming the Index. Stock selection in biotechnology was the primary cause of the fund’s relative underperformance. Stock selection in pharmaceuticals was another area of relative weakness. Whereas stock selection in health care providers, biotechnology, and underweight to life sciences tools & services contributed to better relative results. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first quarter 2025 investor letter, PGIM Jennison Health Sciences Fund highlighted stocks such as CVS Health Corporation (NYSE:CVS). CVS Health Corporation (NYSE:CVS) is a US-based health solutions provider. The one-month return of CVS Health Corporation (NYSE:CVS) was 3.77%, and its shares gained 15.72% of their value over the last 52 weeks. On July 7, 2025, CVS Health Corporation (NYSE:CVS) stock closed at $66.68 per share with a market capitalization of $84.352 billion.

PGIM Jennison Health Sciences Fund stated the following regarding CVS Health Corporation (NYSE:CVS) in its first quarter 2025 investor letter:

“CVS Health Corporation (NYSE:CVS) has market leading positions in health insurance, pharmacy, and drug benefits. The team initiated a position in CVS because the company is significantly under earning in its health insurance unit and we believe the company’s new management will execute on a plan to improve the performance of the unit and consequently we should see earnings improve. Should Aetna return to normal profit margins, we see earnings nearly doubling over the next 2-3 years and that should lift the stock. The stock responded positively to initial 2025 financial guidance and the new management team’s plans.”

CVS Health Corporation (CVS) Outpaces Broader Market with Strong 2025 Rally

A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products.

CVS Health Corporation (NYSE:CVS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 73 hedge fund portfolios held CVS Health Corporation (NYSE:CVS) at the end of the first quarter, compared to 74 in the previous quarter. In the first quarter of 2025, CVS Health Corporation (NYSE:CVS) reported revenue of $94.59 billion, representing a 7% year-over-year growth. While we acknowledge the potential of CVS Health Corporation (NYSE:CVS) 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 CVS Health Corporation (NYSE:CVS) and shared the list of the best dividend stocks for 2025. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of CVS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.