Quarterly Earnings Beat Lifted Sphere Entertainment Co. (SPHR) in Q2

Ariel Investments, an investment management company, released its “Ariel Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter was a volatile period. Stocks fell sharply in early April following the “Liberation Day” tariff announcement, pushing the market close to bear market territory. Later, the pause in plans led to a strong recovery. Excitement for artificial intelligence (AI) stocks reignited, with positive economic data and strong corporate earnings driving U.S. indices to new all-time highs. Growth stocks outperformed value stocks, and large caps continued to outperform their small-cap counterparts. Against this backdrop, Ariel Fund returned 6.96% in the quarter, lagging behind both the Russell 2500 Value Index’s +7.29% return and exceeding the Russell 2000 Value Index’s +4.97% gain. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its second quarter 2025 investor letter, Ariel Fund highlighted stocks such as Sphere Entertainment Co. (NYSE:SPHR). Sphere Entertainment Co. (NYSE:SPHR) is a US-based live entertainment and media company. Sphere Entertainment Co.’s (NYSE:SPHR) one-month return was 12.92%, and its shares gained 2.97% of their value over the last 52 weeks. On July 18, 2025, Sphere Entertainment Co. (NYSE:SPHR) stock closed at $46.15 per share, with a market capitalization of $1.661 billion.

Ariel Fund stated the following regarding Sphere Entertainment Co. (NYSE:SPHR) in its second quarter 2025 investor letter:

“Several stocks in the portfolio had strong returns in the quarter. Live entertainment, media and technology company, Sphere Entertainment Co. (NYSE:SPHR) advanced following a quarterly earnings beat driven by resilient consumer demand and lower than anticipated operating costs. We expect financial results will continue to ramp as Sphere debuts its next fully immersive experience, The Wizard of Oz, later this summer; scales its concert residencies; and reaches higher venue utilization across show types. Advertising, sponsorship and suite revenue should provide further upside. Meanwhile, expansion with additional spheres beyond Abu Dhabi remains a priority. Additionally, MSG Networks and its lenders worked out an agreement in the quarter, reducing the debt burden for the regional sports networks business going forward and removing an overhang on shares. In our view, the experiential immersive venue in Las Vegas and its franchise opportunities present a meaningfully underappreciated long term opportunity.”

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Stagehands setting up the equipment for a live entertainment event.

Sphere Entertainment Co. (NYSE:SPHR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 1 hedge fund portfolios held Sphere Entertainment Co. (NYSE:SPHR) at the end of the first quarter, compared to 1 in the previous quarter. While we acknowledge the risk and potential of Sphere Entertainment Co. (NYSE:SPHR) 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 Sphere Entertainment Co. (NYSE:SPHR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Sphere Entertainment Co. (NYSE:SPHR) and shared the list of best stocks to buy according to John W. Rogers of Ariel Investments. In Q1 2025, investor letter, Ariel Fund noted that Sphere Entertainment Co. (NYSE:SPHR) declined due to profit taking following robust earnings. In addition, please check out our hedge fund investor letters Q2 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.