Here's What Lifted TKO Group Holdings (TKO) in Q2

Cooper Investors, an investment management firm, released its “Cooper Investors Global Equities Fund (Unhedged)” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned 5.21% in the second quarter, compared to a 6.05% return for the MSCI AC World Index Net Divs in Australian benchmark. The portfolio returned 24.4% for the financial year compared to 18.4% return for the benchmark. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second quarter 2025 investor letter, Cooper Investors Global Equities Fund highlighted stocks such as TKO Group Holdings, Inc. (NYSE:TKO). TKO Group Holdings, Inc. (NYSE:TKO) is a sports and entertainment company. The one-month return of TKO Group Holdings, Inc. (NYSE:TKO) was -3.88%, and its shares gained 61.35% of their value over the last 52 weeks. On July 16, 2025, TKO Group Holdings, Inc. (NYSE:TKO) stock closed at $169.13 per share, with a market capitalization of $13.826 billion.

Cooper Investors Global Equities Fund stated the following regarding TKO Group Holdings, Inc. (NYSE:TKO) in its second quarter 2025 investor letter:

"TKO Group Holdings, Inc. (NYSE:TKO) is the owner and operator of the two leading combat sports content assets – the UFC and WWE. We wrote about TKO in our September Quarterly Report (Insights, Fund Performance & Financial Updates | Cooper Investors - Cooper Investors). Since making our initial investment, the company has also acquired Premier Bull Riding (PBR), sports marketing agency IMG and premium (sports) experience provider On Location (in a single transaction).  The core UFC and WWE assets still account for the vast majority of TKO’s economics.

TKO has had a strong start to 2025; UFC and WWE grew EBITDA 17% and 38% respectively in the March quarter and the company expects to grow EBITDA at a mid-teens rate for calendar year 2025.

An important near-term milestone is the renewal of the UFC media rights in the US. These rights account for over 15% of TKO’s revenues, so while the absolute dollar gure is important (and we expect a material step-up from the current deal), we are more focused on the partners TKO chooses to work with. For example, TKO signed a landmark global deal with Net ix for the WWE last year and this is proving to unlock material upside in the other parts of content flywheel, namely sponsorship and live events (site fees and ticketing).

We also believe that there is a larger site fee opportunity for TKO, as compared to our initial expectations. TKO currently earns site fees from local governments on a portion of its 24 marquee annual events (e.g. Wrestlemania, UFC 314). Across UFC, WWE and PBR the company puts on close to 200 annual events. By “festivalising” a combination of these events across multiple days, TKO is demonstrating they can deliver more economic value to cities and hence earn site fees on previously unmonetised events…” (Click here to read the full text)

TKO Group Holdings, Inc. (NYSE:TKO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held TKO Group Holdings, Inc. (NYSE:TKO) at the end of the first quarter, which was 54 in the previous quarter. While we acknowledge the potential of TKO 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 also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered TKO Group Holdings, Inc. (NYSE:TKO) and shared Lindsell Train Global Equity Fund's views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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