ClearBridge Investments, an investment management company, published its Q3 2025 investor letter “ClearBridge Large Cap Growth Strategy.” A copy of the letter can be downloaded here. Stocks continued their upward trajectory in the third quarter, with the S&P 500 index rising 8.1% and the tech-heavy Nasdaq Composite rising 11.2% to hit all-time highs. Investor optimism was boosted by favorable tariff outcomes, July’s One Big Beautiful Bill, expected interest rate cuts and strong corporate earnings, particularly in technology and the Magnificent Seven. The benchmark Russell 1000 Growth Index rose 10.5% during the quarter. The strategy delivered strong absolute performance in the quarter, but underperformed the benchmark. Underexposure to perceived winners in AI and ownership of several names considered by investors to be losers in AI led to the underperformance. Plus, check out the fund’s top five holdings to learn your best picks in 2025.
In its Q3 2025 investor letter, ClearBridge Large Cap Growth Strategy highlighted stocks like Workday, Inc. (NASDAQ:WDAY). Workday, Inc. (NASDAQ:WDAY) is a technology company that provides business applications in the cloud. Workday, Inc. (NASDAQ:WDAY)’s monthly performance was 2.18% and its shares gained 0.59% of its value in the last 52 weeks. On October 3, 2025, Workday, Inc. (NASDAQ:WDAY) stock closed at $236.48 per share, with a market capitalization of $63.14 billion.
ClearBridge Large Cap Growth Strategy stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its Q3 2025 investor letter:
“We left positions in Business Day, Inc. (NASDAQ:WDAY) and Accenture, reducing our exposure to application software vendors given slowing fundamental growth and increasing risks around AI. “Workday continues to see slow core organic growth, particularly in the human capital management segment, and has yet to develop a comprehensive set of AI tools needed to support pricing and incremental growth opportunities.”
Workday, Inc. (NASDAQ:WDAY) isn’t on our list of the 30 most popular stocks among hedge funds. According to our database, 76 hedge fund portfolios owned Workday, Inc. (NASDAQ:WDAY) at the end of the second quarter, compared to 85 in the previous quarter. In the fiscal second quarter of 2026, Workday, Inc. (NASDAQ:WDAY) reported total revenue of $2,348 million, representing 13% year-over-year growth. While we recognize the potential of WORKDAY, INC. (NASDAQ:WDAY) 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.