Sands Capital, an investment management company, published its “Sands Capital Select Growth Strategy” investor letter for the third quarter of 2025. A copy of the letter can be downloaded here. US large-cap growth stocks continued to recover from a sharp sell-off in early April. Strong corporate earnings, investor enthusiasm around artificial intelligence (AI), and rising expectations of an easing of Federal Reserve policy fueled the strong gains. The portfolio returned 6.3% (net) in the quarter, compared to the benchmark’s 10.5% gain. You can check out the fund’s top five holdings to learn more about your best picks for 2025.
In its Q3 2025 investor letter, Sands Capital Select Growth Strategy highlighted stocks like Netflix, Inc. (NASDAQ:NFLX). Founded in 1997, Netflix, Inc. (NASDAQ:NFLX) is a provider of entertainment services. Netflix, Inc. (NASDAQ:NFLX)’s monthly performance was -3.55% and its shares gained 20.98% of its value in the last 52 weeks. On November 26, 2025, shares of Netflix, Inc. (NASDAQ:NFLX) closed at $106.14 per share, with a market capitalization of $449.749 million.
Sands Capital Select Growth Strategy stated the following regarding Netflix, Inc. (NASDAQ:NFLX) in its Q3 2025 investor letter:
“Netflix, Inc.. (NASDAQ:NFLX) is the world’s largest producer and distributor of streaming video content, based on content investment and subscriber count. The stock fell in the third quarter after strong first-half performance in 2025 boosted its forward earnings multiple to the highest level since 2022, prompting some profit-taking. Fundamentally, the business continues to perform well. Netflix raised its full-year revenue guidance by $700 million at the high end, citing stronger subscriber growth, better advertising performance and a weaker US dollar. It also raised operating margin guidance by 1 percentage point to 30 percent. We view this as conservative, given the lack of a significant increase in operating expenses. “The guidance implies a slowdown in margin expansion for the second half of 2025, contrasting with more than 6 percentage points of expansion in 2024 and more than 5 percentage points in the first half of 2025. Our proprietary survey results continue to validate our thesis, with Netflix leading in engagement, retention, content quality and perceived value.”
Netflix, Inc. (NASDAQ:NFLX) ranks 14th on our list of the 30 most popular stocks among hedge funds. According to our database, 133 hedge fund portfolios owned Netflix, Inc. (NASDAQ:NFLX) at the end of the second quarter, compared to 150 in the previous quarter. While we recognize the potential of Netflix, Inc. (NASDAQ:NFLX) as an investment, we believe certain AI stocks offer greater growth 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.