TCW Funds, an investment management company, released its Q3 2025 investor letter “TCW Concentrated Large Cap Growth Fund.” A copy of the letter can be downloaded here. Stock markets continued their recovery in the third quarter, driven by continued optimism around AI investments and positive corporate results. In this context, the fund (which I share) obtained a return of +4.11% in the quarter, compared to +10.51% for the Russell 1000 Growth index. Plus, check out the fund’s top five holdings to learn your best picks in 2025.
In its Q3 2025 investor letter, TCW Concentrated Large Cap Growth Fund highlighted stocks like Eaton Corporation plc (NYSE:ETN). Eaton Corporation plc (NYSE:ETN) is a global energy management company. Eaton Corporation plc (NYSE:ETN)’s monthly performance was -5.27% and its shares gained 5.23% of its value in the last 52 weeks. On December 24, 2025, Eaton Corporation plc (NYSE:ETN) shares closed at $323.67 per share, with a market capitalization of $126.005 million.
TCW Concentrated Large Cap Growth Fund stated the following regarding Eaton Corporation plc (NYSE:ETN) in its Q3 2025 investor letter:
“Eaton Corporation plc (NYSE:ETN) (ETN; Industrial; 1.85%**) – Eaton Corporation plc is an intelligent energy management company that manufactures products for the data center, utility, industrial, commercial, machine building, residential, aerospace and mobility markets. The company has evolved from a lower-growth, highly cyclical industrial conglomerate to a higher-growth, higher-margin, less-cyclical company focused on the electrical and aerospace end markets, which largely operate as oligopolies. The company is driven by multiple secular tailwinds, including electrification, AI data center construction, and relocation. “A large backlog of multi-year megaproject announcements and long lead times provide multi-year visibility, and we believe the current share price does not adequately reflect the long-term cash flow generation potential of the business.”
Eaton Corporation plc (NYSE:ETN) isn’t on our list of the 30 most popular stocks among hedge funds. According to our database, 72 hedge fund portfolios held Eaton Corporation plc (NYSE:ETN) at the end of the third quarter, compared to 74 in the previous quarter. Eaton Corporation plc (NYSE:ETN) reported quarterly earnings of $7 billion for the third quarter of 2025 and increased its margins by 70 basis points to 25%. While we recognize the potential of Eaton Corporation plc (NYSE:ETN) 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’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.