Ariel Investments, an investment management company, released its “Ariel Global Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2025, investors challenged the idea of “American exceptionalism.” After record highs in January, U.S. markets fell due to tariff fears and policy uncertainty, with the Magnificent Seven dropping nearly 15% due to concerns over America’s AI leadership. Meanwhile, international equity markets outperformed the U.S. in their strongest quarterly showing in 15 years. Against this backdrop, the Ariel Global fund traded +6.31% higher in the quarter, compared to the -1.32% return of its primary benchmark, the MSCI ACWI Index, and the +4.77% return of its secondary benchmark, the MSCI ACWI Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Ariel Global Fund highlighted stocks such as NetApp, Inc. (NASDAQ:NTAP). Headquartered in San Jose, California, NetApp, Inc. (NASDAQ:NTAP) offers a range of enterprise software, systems, and services that enable customers to transform their data infrastructure. The one-month return of NetApp, Inc. (NASDAQ:NTAP) was 3.11%, and its shares lost 19.04% of their value over the last 52 weeks. On June 16, 2025, NetApp, Inc. (NASDAQ:NTAP) stock closed at $104.20 per share, with a market capitalization of $20.878 billion.
Ariel Global Fund stated the following regarding NetApp, Inc. (NASDAQ:NTAP) in its Q1 2025 investor letter:
“Alternatively, market leader for computer storage systems, NetApp, Inc. (NASDAQ:NTAP) traded lower over the period following an earnings miss and disappointing fiscal fourth quarter guidance. While the outlook should represent the high point of NetApp’s component costs, foreign exchange headwinds, weakness in global public sector demand and the impact of a divestiture also present headwinds. Meanwhile, the company continues to refresh its product solutions and expects rising demand for Artificial Intelligence (AI) infrastructure across geographies and verticals.”
A multi-monitor workstation displaying data-centric services.
NetApp, Inc. (NASDAQ:NTAP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held NetApp, Inc. (NASDAQ:NTAP) at the end of the first quarter, which was 41 in the previous quarter. In the fiscal fourth quarter of 2025, NetApp, Inc.’s (NASDAQ:NTAP) total revenue was $1.73 billion, reflecting an increase of 4% year over year and up 6% sequentially. While we acknowledge the potential of NetApp, Inc. (NASDAQ:NTAP) 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 NetApp, Inc. (NASDAQ:NTAP) and shared the list of AI stocks surging on news and analyst ratings. 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 NTAP 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.
