Macquarie Large Cap Growth Fund Sold Its Stake in Electronic Arts (EA)

Macquarie Asset Management, an investment management company, released its “Macquarie Large Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, Macquarie Large Cap Growth Fund Institutional Class shares posted negative absolute returns; however, they surpassed the performance of the Fund’s benchmark, the Russell 1000® Growth Index. Despite market challenges, the firm’s investment style performed well, focusing on higher-quality businesses. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, Macquarie Large Cap Growth Fund highlighted stocks such as Electronic Arts Inc. (NASDAQ:EA). Electronic Arts Inc. (NASDAQ:EA) markets, publishes, and delivers games, content, and services for game consoles, PCs, and mobile phones. The one-month return of Electronic Arts Inc. (NASDAQ:EA) was 7.54%, and its shares gained 12.36% of their value over the last 52 weeks. On June 24, 2025, Electronic Arts Inc. (NASDAQ:EA) stock closed at $157.95 per share, with a market capitalization of $39.608 billion.

Macquarie Large Cap Growth Fund stated the following regarding Electronic Arts Inc. (NASDAQ:EA) in its Q1 2025 investor letter:

“The largest individual detractors from performance relative to the benchmark were not owning Meta Platforms, not owning Eli Lilly & Co., and our position in Electronic Arts Inc. (NASDAQ:EA). Lastly, Electronic Arts is one of the leading video game developers with a portfolio that includes franchises like Madden NFL, EA Sports FC, and The Sims. While the company transitioned to digital, a tailwind for margins, and maintained nearly impenetrable competitive positions across several popular genres, it also made some acquisition missteps into mobile and has been unable to further monetize its competitive strengths. The next catalyst for a stock rerating has been absent, and we became concerned the quality characteristics that made this business so compelling were declining. With that, we exited the position.”

A close up of an employee’s hands at a digital gaming console, controlling a popular game.

Electronic Arts Inc. (NASDAQ:EA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Electronic Arts Inc. (NASDAQ:EA) at the end of the first quarter, which was 45 in the previous quarter. While we acknowledge the potential of Electronic Arts Inc. (NASDAQ:EA) 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 Electronic Arts Inc. (NASDAQ:EA) and shared Maple Tree Capital’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. While we acknowledge the potential of EA 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.