Here's Why Core Laboratories (CLB) Traded Lower in Q2

Ariel Investments, an investment management company, released its “Ariel Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter was a volatile period. Stocks fell sharply in early April following the “Liberation Day” tariff announcement, pushing the market close to bear market territory. Later, the pause in plans led to a strong recovery. Excitement for artificial intelligence (AI) stocks reignited, with positive economic data and strong corporate earnings driving U.S. indices to new all-time highs. Growth stocks outperformed value stocks, and large caps continued to outperform their small-cap counterparts. Against this backdrop, Ariel Fund returned 6.96% in the quarter, lagging behind both the Russell 2500 Value Index’s +7.29% return and exceeding the Russell 2000 Value Index’s +4.97% gain. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its second quarter 2025 investor letter, Ariel Fund highlighted stocks such as Core Laboratories Inc. (NYSE:CLB). Core Laboratories Inc. (NYSE:CLB) offers reservoir description and enhancement services and products to the energy industry. The one-month return of Core Laboratories Inc. (NYSE:CLB) was -2.06%, and its shares lost 49.62% of their value over the last 52 weeks. On July 18, 2025, Core Laboratories Inc. (NYSE:CLB) stock closed at $11.40 per share, with a market capitalization of $534.465 million.

Ariel Fund stated the following regarding Core Laboratories Inc. (NYSE:CLB) in its second quarter 2025 investor letter:

"By comparison, oil services company, Core Laboratories Inc. (NYSE:CLB) traded lower in the quarter on mixed earnings results. Although increased demand for diagnostic services in U.S. onshore and offshore markets aided the Production Enhancement segment, this growth was neutralized by weaker-than-expected Reservoir Description performance due to seasonality, geopolitical tensions, tariff concerns and commodity price volatility. Importantly, management noted tariffs should not have a significant impact on the business given its service-related revenue. CLB’s product sales are also primarily manufactured and consumed domestically. Looking ahead, the company continues to project international growth from projects in the Middle East, Asia Pacific and West Africa and remains laser focused on generating positive free cash flow, reducing debt and improving its return on invested capital."

Core Laboratories Inc. (NYSE:CLB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held Core Laboratories Inc. (NYSE:CLB) at the end of the first quarter, compared to 18 in the previous quarter. While we acknowledge the potential of Core Laboratories Inc. (NYSE:CLB) 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 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.