Aristotle Atlantic’s Large Cap Growth Sold Datadog (DDOG) Following the Quarterly Earnings Release

Aristotle Atlantic Partners, LLC, an investment advisor, released its “Large Cap Growth Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The U.S. equity market experienced a modest decline in Q1 2025, with the S&P 500 Index falling 4.27%, while bonds showed stability with the Bloomberg U.S. Aggregate Bond Index rising 2.78%. In the first quarter, Aristotle Atlantic’s Large Cap Growth Strategy delivered -9.55% gross of fees (-9.68% net of fees), outperforming the Russell 1000 Growth Index’s -9.97% return. Security selection led the portfolio to outperform in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Aristotle Atlantic Large Cap Growth Strategy highlighted stocks such as Datadog, Inc. (NASDAQ:DDOG). Datadog, Inc. (NASDAQ:DDOG) is an observability and security platform for cloud applications. The one-month return of Datadog, Inc. (NASDAQ:DDOG) was -9.79%, and its shares lost 24.49% of their value over the last 52 weeks. On April 23, 2025, Datadog, Inc. (NASDAQ:DDOG) stock closed at $94.58 per share with a market capitalization of $32.662 billion.

Aristotle Atlantic Large Cap Growth Strategy stated the following regarding Datadog, Inc. (NASDAQ:DDOG) in its Q1 2025 investor letter:

“We sold the position in Datadog, Inc. (NASDAQ:DDOG) following the company’s most recent quarterly results. We remain concerned about the loss of a key customer(s) in the AI development space and the impact that could have on Datadog’s growth rate. While the company is executing on its core business, we see a rising risk of a slowing top-line growth rate, which we believe would result in valuation compression and a negative impact on the stock performance.”

Is Datadog, Inc. (DDOG) the Best Growth Stock to Buy According to Billionaires?

A close-up of a laptop with a software engineer coding on the monitor.

Datadog, Inc. (NASDAQ:DDOG) is in not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held Datadog, Inc. (NASDAQ:DDOG) at the end of the fourth quarter which was 71 in the previous quarter. While we acknowledge the potential of Datadog, Inc. (NASDAQ:DDOG) 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.

In another article, we covered Datadog, Inc. (NASDAQ:DDOG) and shared the list of best growth 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.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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