Here’s What Boosted Talen Energy Corporation’s (TLN) Performance in Q2

Loomis Sayles, an investment management company, released its “Small Cap Value Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equities significantly rallied in the second quarter amid tariff and trade concerns and geopolitical events. The fund returned 5.40% compared to 4.97% for the Russell 2000® Value Index due to positive allocation effects across multiple sectors.  In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Loomis Sayles Small Cap Value Fund highlighted stocks such as Talen Energy Corporation (NASDAQ:TLN). Talen Energy Corporation (NASDAQ:TLN) is an independent power producer and infrastructure company. The one-month return of Talen Energy Corporation (NASDAQ:TLN) was -0.93%, and its shares gained 162.62% of their value over the last 52 weeks. On September 02, 2025, Talen Energy Corporation (NASDAQ:TLN) stock closed at $375.15 per share, with a market capitalization of $17.139 billion.

Loomis Sayles Small Cap Value Fund stated the following regarding Talen Energy Corporation (NASDAQ:TLN) in its second quarter 2025 investor letter:

“Talen Energy Corporation (NASDAQ:TLN) is a Mid-Atlantic based independent power producer, which, under a previous management, slipped into bankruptcy in 2022 due to a liquidity crisis caused by rising natural gas prices and collateral requirements related to a commodity hedging strategy. By early 2024, with new management and firm financial footing, we purchased the stock based on the thesis that the assets, most notably a large nuclear power plant in northern Pennsylvania with a data center under construction immediately next door, were significantly undervalued as investors had largely shunned the company due to their prior financial difficulties. In March 2024, Talen struck a deal with Amazon Web Services where Amazon acquired the adjacent data center and contracted to purchase nearly half of the nuclear power plant’s capacity at rates significantly above the prevailing market price. In 2025, forecasts for an acceleration of power demand have emerged, in part due to power hungry Artificial Intelligence applications as well as the reshoring of manufacturing capacity into the US and the electrification of many everyday products. During the second quarter of 2025, Talen restructured its deal with Amazon to expand the amount of premium priced power under contract while also mitigating recent regulatory concerns.”

Talen Energy Corporation (NASDAQ:TLN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held Talen Energy Corporation (NASDAQ:TLN) at the end of the second quarter, which was 80 in the previous quarter. While we acknowledge the risk and potential Talen Energy Corporation (NASDAQ:TLN) 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 Talen Energy Corporation (NASDAQ:TLN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Talen Energy Corporation (NASDAQ:TLN) and shared the list of best performing utilities stocks to buy. In addition, please check out our hedge fund investor letters Q2 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.