Key Drivers Behind AbbVie’s (ABBV) Performance

RS Investments, an investment management company, released its “RS Large Cap Value Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy underperformed its benchmark, the Russell 1000 Value Index (the “Index”), and returned 1.57% (net) versus a return of 2.14% for the Index. The strong performance from stock selection in Consumer Discretionary and Utilities aided relative performance in the quarter, while stock selection in Materials and Information Technology detracted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, RS Large Cap Value Strategy highlighted stocks such as AbbVie Inc. (NYSE:ABBV). AbbVie Inc. (NYSE:ABBV) is a research-based biopharmaceutical company. The one-month return of AbbVie Inc. (NYSE:ABBV) was 1.20%, and its shares gained 15.34% of their value over the last 52 weeks.  On May 22, 2025, AbbVie Inc. (NYSE:ABBV) stock closed at $182.54 per share with a market capitalization of $322.439 billion.

RS Large Cap Value Strategy stated the following regarding AbbVie Inc. (NYSE:ABBV) in its Q1 2025 investor letter:

“AbbVie Inc. (NYSE:ABBV) was a strong positive contributor to performance during the first quarter of 2025. The stock benefited from a confluence of company-specific and macro drivers, including robust fourth-quarter results reported in February and renewed investor interest in the pharmaceutical sector broadly. AbbVie’s fourth quarter earnings exceeded expectations on both revenue and EPS, driven by continued growth in its immunology and neuroscience franchises, alongside stabilizing trends in Humira sales post loss of patent exclusivity. Importantly, during the first quarter AbbVie announced a large licensing deal with Gubra (a Danish biotech company) which gives AbbVie co-development and co commercialization rights on their lead clinical-stage obesity drug. While still early in development, the asset provides optionality in one of the most attractive therapeutic areas in biopharma today and underscores management’s willingness to reposition the company for long-term growth beyond its core inflammation franchise. On the macro front, pharmaceutical stocks in general rebounded after several years of relative underperformance as investors sought exposure to defensive, high-margin business models trading at modest valuations relative to the broader market. We remain constructive on AbbVie and believe the company is well-positioned to deliver high-single-digit earnings growth through the end of the decade, supported by durable franchises, a promising pipeline, and a healthy balance sheet.”

AbbVie Inc. (NYSE:ABBV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 85 hedge fund portfolios held AbbVie Inc. (NYSE:ABBV) at the end of the fourth quarter, compared to 68 in the third quarter. While we acknowledge the potential of AbbVie Inc. (NYSE:ABBV) 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 AbbVie Inc. (NYSE:ABBV) and shared Renaissance Large Cap Growth Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.