Diamond Hill Capital, an investment management company, released its “Long-Short Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The market was mixed in the first quarter of 2025, due to the uncertainty caused by the new administration’s avalanche of activity. However, the portfolio outperformed the Russell 1000 Index and the blended benchmark (60% Russell 1000 Index/40% Bloomberg US Treasury Bills 1-3 Month Index) in the quarter. In Q1, both long and short books generated relative tailwinds, with the short book underperforming the index, while the long book was positive, despite the index being negative. In addition, you may look at the fund’s top 5 holdings to learn about its best picks in 2025.
In its first-quarter 2025 investor letter, Diamond Hill Long-Short Strategy highlighted stocks such as Salesforce, Inc. (NYSE:CRM). Salesforce, Inc. (NYSE:CRM) offers Customer Relationship Management (CRM) technology that brings companies and customers together. The one-month return of Salesforce, Inc. (NYSE:CRM) was -3.56%, and its shares gained 9.78% of their value over the last 52 weeks. On June 23, 2025, Salesforce, Inc. (NYSE:CRM) stock closed at $263.41 per share, with a market capitalization of $251.82 billion.
Diamond Hill Long-Short Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q1 2025 investor letter:
“As volatility picked up sharply in the quarter, we were active in the portfolio — and we anticipate that as volatility continues into Q2, we will likewise attempt to capitalize on compelling opportunities to reposition the portfolio for the period ahead. Among the new positions we initiated in Q1 were long positions in Salesforce, Inc. (NYSE:CRM) and Capital One, as well as short positions in Matson and eBay.
Salesforce provides customer relationship management (CRM) technology to companies globally. We believe the company is well-positioned to reverse recently unfavorable cyclicality and capitalize on go-to-market enhancements, price increases and GenAI revenue. As the company evolves its go-to-market strategy, shifts its sales channel mix, consolidates its tech stack and transitions to third-party data centers, we anticipate Salesforce should meaningfully expand margins. Shares were trading at an attractive discount relative to our estimate of intrinsic value, and so we capitalized on the opportunity to initiate a position.”
A customer service team in an office setting using the company’s Customer 360 platform to communicate with customers.
Salesforce, Inc. (NYSE:CRM) is in 16th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 140 hedge fund portfolios held Salesforce, Inc. (NYSE:CRM) at the end of the first quarter, which was 162 in the previous quarter. In the fiscal first quarter of 2026, Salesforce, Inc. (NYSE:CRM) delivered $9.83 billion in revenue representing an 8% increase from last year’s comparable quarter. While we acknowledge the potential of Salesforce, Inc. (NYSE:CRM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Salesforce, Inc. (NYSE:CRM) and shared the list of best Fortune 500 stocks to buy according to billionaires. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of CRM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
