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Carillon Tower Advisers, an investment management company, released its “Carillon Eagle Growth & Income Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The S&P 500 Index ended Q1 down 4.3%, marking a turbulent start to 2025. The volatility that began in February was triggered by factors including policy uncertainties, economic deceleration, and AI investment sustainability concerns. The market's first intra-quarter drawdown exceeded 10% in 28 months. Adding to the uncertainty, the 10-year U.S. Treasury yield declined from 4.8% to 4.25%, leading to an equity market rotation favoring defensive sectors, quality stocks, and dividend-yielding equities over growth and momentum-driven investments, with top-performing sectors like energy, healthcare, and consumer staples. Moreover, the quarter saw market participation broaden, with index leadership shifting from mega-cap technology companies to a more diverse base of stocks, as evidenced by the S&P 500® Equal Weight Index's outperformance. Additionally, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, Carillon Eagle Growth & Income Fund highlighted stocks such as Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions. The one-month return of Microsoft Corporation (NASDAQ:MSFT) was 25.09%, and its shares gained 6.95% of their value over the last 52 weeks. On May 19, 2025, Microsoft Corporation (NASDAQ:MSFT) stock closed at $458.87 per share with a market capitalization of $3.411 trillion.
Carillon Eagle Growth & Income Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q1 2025 investor letter:
"Microsoft Corporation (NASDAQ:MSFT) was also weak due to concerns that the Chinese DeepSeek large language AI model would create increased competition for OpenAI, in which Microsoft owns a significant stake. Additionally, Microsoft was left out of the joint venture financing the multi-national Stargate Project, though the company claims this was its choice."
A development team working together to create the next version of Windows.
Microsoft Corporation (NASDAQ:MSFT) is in second position our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 317 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the fourth quarter compared to 279 in the third quarter. In the fiscal third quarter of 2025, Microsoft Corporation (NASDAQ:MSFT) reported $70.1 billion in revenues, up 13% year-over-year. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) 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 undervalued AI stock set for massive gains.