Smoke-Free Product Platform Boosted Philip Morris International (PM) in Q2

Artisan Partners, an investment management company, released its “Artisan Value Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets faced significant volatility in the second quarter, fueled by the announcement and subsequent pause of the “Liberation Day” tariffs. Against this backdrop, the fund’s Investor Class ARTLX, Advisor Class APDLX, and Institutional Class APHLX returned 5.99%, 5.96%, and 5.96%, respectively, in the second quarter compared to a 3.79% return for the Russell 1000® Value Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its second-quarter 2025 investor letter, Artisan Value Fund highlighted stocks such as Philip Morris International Inc. (NYSE:PM). Philip Morris International Inc. (NYSE:PM) is a tobacco company that offers cigarettes and smoke-free products. The one-month return of Philip Morris International Inc. (NYSE:PM) was 7.31%, and its shares have appreciated by 43.92% over the past 52 weeks. On August 20, 2025, Philip Morris International Inc. (NYSE:PM) stock closed at $172.85 per share, with a market capitalization of $269.057 billion.

Artisan Value Fund stated the following regarding Philip Morris International Inc. (NYSE:PM) in its second quarter 2025 investor letter:

“In the consumer staples sector, tobacco company Philip Morris International Inc. (NYSE:PM) and discount retailer Dollar General (DG) continued their strength from Q1. Both stocks are up over 50% year to date. PM’s growth is being driven by its smoke-free product platform led by iQOS, a heat-not-burn tobacco alternative, and Zyn nicotine pouches. We believe PM still has significant runway for growth in the US—the world’s most profitable nicotine market and one that makes up less than 10%ofPM’srevenues. Looking at PM through our margin of safety criteria, the business trades for an undemanding valuation and has extraordinary business economics and a strong credit profile.”

Philip Morris International (PM) Outperformed in 2025 as Smoke-Free Growth Accelerates

A man exhaling smoke from a cigarette indicating the use of tobacco products.

Philip Morris International Inc. (NYSE:PM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held Philip Morris International Inc. (NYSE:PM) at the end of the first quarter, which was 102 in the previous quarter. While we acknowledge the risk and potential of Philip Morris International Inc. (NYSE:PM) 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 Philip Morris International Inc. (NYSE:PM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Philip Morris International Inc. (NYSE:PM) and shared the list of defensive stocks billionaires are buying amid US trade tariff uncertainty. 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.