ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The majority of growth indexes entered correction territory during the quarter, due to pressure from the chaotic tariff implementation, concerns about a weakening U.S. economy, and increased inflation. Against this backdrop, the strategy outperformed the benchmark, driven by diversified stock selection and an underweight exposure to the Magnificent Seven. The S&P 500 Index declined 4.27% in the quarter and the benchmark Russell 1000 Growth Index (RLG) fell 9.97%. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first quarter 2025 investor letter, ClearBridge Large Cap Growth Strategy emphasized stocks such as Synopsys, Inc. (NASDAQ:SNPS). Synopsys, Inc. (NASDAQ:SNPS) offers electronic design automation software products used to design and test integrated circuits. The one-month return of Synopsys, Inc. (NASDAQ:SNPS) was -11.56%, and its shares lost 33.06% of their value over the last 52 weeks. On April 7, 2025, Synopsys, Inc. (NASDAQ:SNPS) stock closed at $380.90 per share with a market capitalization of $58.895 billion.
ClearBridge Large Cap Growth Strategy stated the following regarding Synopsys, Inc. (NASDAQ:SNPS) in its Q1 2025 investor letter:
“The purchase of Synopsys, Inc. (NASDAQ:SNPS), a leader in electronic design automation (EDA) software and custom chip designs, was the most significant change to our IT holdings. Synopsys is a software provider that operates in a duopoly market with multiple avenues of growth driven by increased complexity of semiconductor chips. The company’s EDA software and tools are mission critical and difficult to replicate, providing defense to its high-margin business model. The stock has lagged over the past year as the recent wave of AI infrastructure spending has not yet accelerated its revenue growth. We think this is driven largely by softness in the cyclical portions of the semiconductor market and that Synopsys remains well positioned to benefit from AI infrastructure spending and increasingly complex chip design.”
A close-up of a tech engineer soldering a modern system-on-chip circuit board in a laboratory setting.
Synopsys, Inc. (NASDAQ:SNPS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Synopsys, Inc. (NASDAQ:SNPS) at the end of the fourth quarter compared to 53 in the third quarter. While we acknowledge the potential of Synopsys, Inc. (NASDAQ:SNPS) 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 cheapest AI stock.
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