Should You Expect Robust Growth Potential for Rhythm Pharmaceuticals (RYTM) Ahead?

ClearBridge Investments, an investment management company, released its “ClearBridge Small Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets made an exceptional recovery from steep declines in April with solid performances in May and June. The strategy modestly underperformed the Russell 2000 Growth Index in the quarter, as the market rally was driven by lower market capitalization, lower-quality non-earners, and a retail volume surge favoring momentum and the riskiest stocks. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, ClearBridge Small Cap Growth Strategy highlighted stocks such as Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM). Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) is a commercial-stage biopharmaceutical company. The one-month return of Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) was -4.79%, and its shares gained 95.91% of their value over the last 52 weeks. On October 2, 2025, Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) stock closed at $97.23 per share, with a market capitalization of $6.458 billion.

ClearBridge Small Cap Growth Strategy stated the following regarding Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) in its second quarter 2025 investor letter:

“Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) is a biopharmaceutical company focused on metabolic conditions related to genetic/injury-related obesity. The company has launched its main product in several rare indications, with likely approval for launching into a much larger indication in the near term. With a variety of pipeline candidates to enhance lifecycle management and address other related illnesses, we see robust growth potential ahead.”

Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 40 hedge fund portfolios held Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) at the end of the second quarter, compared to 47 in the previous quarter. While we acknowledge the risk and potential of Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) 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 Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Rhythm Pharmaceuticals, Inc. (NASDAQ:RYTM) and shared hot mid cap stocks to buy. 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.