Warner Bros. Discovery (WBD) Rallied Due to a Bidding War

Hotchkis & Wiley, an investment management company, released its fourth-quarter 2025 investor letter for the “Hotchkis & Wiley Large Cap Disciplined Value Fund.” A copy of the letter can be downloaded here. In Q4 2025, the S&P 500 returned 2.7%, bringing its yearly gains to 17.9%. Since the 2007-08 financial crisis, the Index has increased tenfold, achieving positive results in 15 of 17 years. However, high valuations have made investors cautious, particularly with the returns concentrated in a few stocks. Excluding the “Magnificent 7,” the forward PE of the S&P 500 Index aligns with historical averages. In 2025, information technology and communication services led performance, but results varied significantly within those sectors. The firm views the potential of certain software companies to be very attractive. In this environment, the Fund outperformed the Russell 1000 Value Index both in Q4 and over the full calendar year. Positive stock selection contributed to the Fund’s relative performance. Please review the Fund’s top 5 holdings to gain insight into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Hotchkis & Wiley Large Cap Disciplined Value Fund highlighted Warner Bros. Discovery, Inc. (NASDAQ:WBD) as one of its leading individual contributors. Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a global media and entertainment company. The one-month return for Warner Bros. Discovery, Inc. (NASDAQ:WBD) was -3.19%, and its shares gained 164.37% over the last 52 weeks. On January 29, 2026, Warner Bros. Discovery, Inc. (NASDAQ:WBD) stock closed at $27.60 per share, with a market capitalization of $68.434 billion.

Hotchkis & Wiley Large Cap Disciplined Value Fund stated the following regarding Warner Bros. Discovery, Inc. (NASDAQ:WBD) in its fourth quarter 2025 investor letter:

“Warner Bros. Discovery, Inc. (NASDAQ:WBD) is a top global TV networks and production company. Its Discovery and Turner networks are major players in U.S. Pay TV, while the Warner Bros. Studio is a leading TV production studio and film studio. WBD’s direct-to-consumer video service, HBO Max, is the third largest global streaming platform. On June 9, WBD announced its intention to split into two companies: the Streaming and Studios segments will become “Warner Bros.” while the linear TV networks will become “Discovery Global”. The company’s stock rallied over the quarter due to a bidding war for the company’s assets between Netflix and Paramount Skydance, which Netflix appears to have won with a cash offer for its studio and streaming business that values the company ~50% higher than its stock price at the end of September.”

Warner Bros. Discovery, Inc. (WBD)'s CEO Is The Right Executive For This Environment, Says Jim Cramer

Warner Bros. Discovery, Inc. (NASDAQ:WBD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 70 hedge fund portfolios held Warner Bros. Discovery, Inc. (NASDAQ:WBD) at the end of the third quarter, up from 67 in the previous quarter. While we acknowledge the risk and potential of Warner Bros. Discovery, Inc. (NASDAQ:WBD) 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 Warner Bros. Discovery, Inc. (NASDAQ:WBD) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Warner Bros. Discovery, Inc. (NASDAQ:WBD) and shared Greenlight Capital’s views on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.