ClearBridge Investments, an investment management company, released its “ClearBridge Mid Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Following the soft start to the year, the midcap fund rebounded in the second quarter, driven by demand for AI and a low-quality rally, which enabled the growth stocks to overcome the tariff-led uncertainty. The strategy failed to outpace the benchmark, despite strong absolute returns, due to limited exposure to several of the rally’s leading participants. However, the firm is optimistic about the ability of the mid-cap growth universe to offer attractive long-term compounders. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its second-quarter 2025 investor letter, ClearBridge Mid Cap Growth Strategy highlighted stocks such as Carvana Co. (NYSE:CVNA). Headquartered in Tempe, Arizona, Carvana Co. (NYSE:CVNA) is an e-commerce platform for buying and selling used cars. The one-month return of Carvana Co. (NYSE:CVNA) was -5.85%, and its shares gained 144.77% of their value over the last 52 weeks. On August 27, 2025, Carvana Co. (NYSE:CVNA) stock closed at $367.35 per share, with a market capitalization of $42.96 billion.
ClearBridge Mid Cap Growth Strategy stated the following regarding Carvana Co. (NYSE:CVNA) in its second quarter 2025 investor letter:
“We were particularly active this quarter in the consumer discretionary sector, where we are seeing weak investor sentiment and some industry leaders with attractive opportunities to improve fundamentals despite an uncertain economy. We re-established a position in Carvana Co. (NYSE:CVNA), the leading online used vehicle retailer. Carvana has emerged from a challenging restructuring period with a return to strong growth, record profitability that leads the legacy auto retail sector, and a clear long-term vision to disrupt the large and highly fragmented auto market. The company is targeting a dramatic scale up from approximately 500,000 annual car sales today to three million over the next five to 10 years, leveraging its existing infrastructure and the Adesa acquisition to support this expansion.”
Carvana Co. (NYSE:CVNA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held Carvana Co. (NYSE:CVNA) at the end of the second quarter, which was 90 in the previous quarter. Carvana Co. (NYSE:CVNA) reported revenue of $4.84 billion in the second quarter of 2025, marking an increase of 42% from Q2 2024. While we acknowledge the potential of Carvana Co. (NYSE:CVNA) 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.
