2025 Third Quarter: Tesla and Growth Strategy

Aristotle Atlantic Partners, LLC published the "Large Scale Growth Strategy" investor letter for the third quarter of 2025, as a firm providing investment advisory services. In the third quarter, the U.S. stock market increased by 8.12%, while the Bloomberg U.S. Government Bond Index finished with a rise of 2.03%. The letter provided information on market review, quarterly performance, and attribution analysis. Aristotle Atlantic's large scale growth strategy yielded a return of 9.76% (9.61% including fees), while the Russell 1000 Growth Index provided a return of 10.51%. The primary reason for the fund's relative underperformance was the impact of security selection. Additionally, you can learn about Aristotle Atlantic's top five stock preferences for 2025 by looking at the fund's holdings.

The third quarter investor letter highlighted stocks such as Tesla, Inc. (NASDAQ:TSLA). Tesla designs, develops, manufactures, and sells electric vehicles and energy generation systems. Tesla's one-month return was -9.63%, while it achieved a 19.37% increase in its stock value over the past 52 weeks. As of November 14, 2025, Tesla's stock price was $404.35 and its market capitalization was $1.345 trillion.

In the third quarter 2025 investor letter, Aristotle Atlantic stated: "Tesla negatively impacted performance in the third quarter. The lower weighting of our strategy compared to the benchmark created a negative effect on relative returns; as the stock performed well throughout the third quarter. At the end of July, Tesla reported a 23% drop in earnings for the second quarter of 2025, which was worse than consensus estimates. The CEO had previously anticipated challenging quarters; however, electric vehicle sales in the third quarter came in better than expected as consumers took advantage of tax credits that expired on September 30. Despite three years of disrupted fundamentals, the investment narrative surrounding Tesla changed concerning robotaxi adoption and the future launch of humanoid robots."

Tesla ranks 23rd on the 30 Most Popular Stocks list. According to our database, at the end of the second quarter, 115 hedge funds held Tesla shares in their portfolios, up from 104 in the previous quarter. While we acknowledge Tesla's potential as an investment, we believe some artificial intelligence stocks offer higher profit potential and carry less risk of loss. If you are looking for an undervalued AI stock that could significantly benefit from Trump-era tariffs and the trend of returning to the domestic market, you can check out our free report on the best short-term AI stock.

In another article, we discussed Tesla and shared a list of AI stocks that investors are following. In the Q3 2025 investor letter, Baron Fund emphasized that Tesla appreciated in value during the quarter due to its strength in the automotive business, increasing investor confidence, and rapid developments in artificial intelligence. You can also check our Q3 2025 page to access hedge fund investor letters.