Optimist Fund Exited Its Position in Revolve (RVLV) in Q3

Optimist Fund, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned +9.1% in the third quarter compared to 7.9% for the benchmark. The firm focuses on acceleration in several cyclical holdings in the portfolio that have been in multi-year downswings, while the world holds attention on the latest developments in AI. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Optimist Fund highlighted stocks such as Revolve Group, Inc. (NYSE:RVLV). Revolve Group, Inc. (NYSE:RVLV) is an online fashion retailer for millennial and Generation Z consumers. The one-month return of Revolve Group, Inc. (NYSE:RVLV) was 2.32%, and its shares lost 8.29% of their value over the last 52 weeks. On October 30, 2025, Revolve Group, Inc. (NYSE:RVLV) stock closed at $22.89 per share, with a market capitalization of $1.632 billion.

Optimist Fund stated the following regarding Revolve Group, Inc. (NYSE:RVLV) in its third quarter 2025 investor letter:

“We also exited Revolve Group, Inc. (NYSE:RVLV) during the quarter. Revolve remains a high-quality business led by an exceptional team, but recent results have tempered our confidence in their ability to return to 20% revenue growth. As a result, we lowered our base-case estimates, which reduced our expected five-year annualized investment return to roughly 15%—below our 20% IRR hurdle rate. While we may own Revolve again in the future, we currently see more compelling opportunities elsewhere.”

Are Analysts Talking About Revolve Group (RVLV)?

Revolve Group, Inc. (NYSE:RVLV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 21 hedge fund portfolios held Revolve Group, Inc. (NYSE:RVLV) at the end of the second quarter, compared to 21 in the previous quarter. In the second quarter of 2025, Revolve Group, Inc. (NYSE:RVLV) generated net sales of $309 million, reflecting a year-over-year increase of 9%. While we acknowledge the risk and potential of Revolve Group, Inc. (NYSE:RVLV) 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 Revolve Group, Inc. (NYSE:RVLV) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Revolve Group, Inc. (NYSE:RVLV) and shared Optimist Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 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.