Here’s Why The AES Corporation (AES) Slid in Q2

Sound Shore Management, an investment management firm, has released its investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. The fund’s Investor Class (SSHFX) and Institutional Class (SSHVX) delivered 3.06% and 3.10%, respectively, in the second quarter of 2025 compared to a 3.79% return for the Russell 1000 Value Index (Russell Value) and 10.94% return for the Standard & Poor 500 Index (S&P 500). Sound Shore’s 35-year annualized returns were 14.92% and 15.14% for SSHFX and SSHVX, respectively, as of June 30, 2025, and were ahead of the Russell Value at 12.76% and trailed the S&P 500 at 19.71%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Sound Shore Management highlighted stocks such as The AES Corporation (NYSE:AES). Headquartered in Arlington, Virginia, The AES Corporation (NYSE:AES) is a diversified power generation and utility company. The one-month return of The AES Corporation (NYSE:AES) was -1.62%, and its shares lost 29.75% of their value over the last 52 weeks. On September 10, 2025, The AES Corporation (NYSE:AES) stock closed at $12.73 per share, with a market capitalization of $9.064 billion.

Sound Shore Management stated the following regarding The AES Corporation (NYSE:AES) in its second quarter 2025 investor letter:

“Conversely, power generator The AES Corporation (NYSE:AES) has been hampered by prospective changes to investment tax credits for renewable energy sources, as policy changes once again froze market participants. This is despite the company having a customer base that continues to place orders for renewable systems to power data centers, regardless of the tax situation. (Post-quarter note – on July 9th, AES was rumored to have also received interest from private equity and infrastructure funds and the stock gained on the possibility of a takeover.)”

AES Corp. (AES) Surges 19.8% on Potential Sale

The AES Corporation (NYSE:AES) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held The AES Corporation (NYSE:AES) at the end of the second quarter, which was 52 in the previous quarter. While we acknowledge the risk and potential The AES Corporation (NYSE:AES) 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 The AES Corporation (NYSE:AES) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered The AES Corporation (NYSE:AES) and shared the list of best stocks to buy in falling markets according to hedge funds. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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