Does Alight (ALIT) Have Growth Opportunities?

Aristotle Capital Boston, LLC, an investment advisor, released its “Small Cap Equity Strategy” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter started with a risk-off environment from the previous quarter, but later regained momentum driven by broad-based elements. In the second quarter, the strategy delivered a return of 3.25% net of fees (3.41% gross of fees) underperforming the 8.50% total return of the Russell 2000 Index. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second quarter 2025 investor letter, Aristotle Capital Small Cap Equity Strategy highlighted stocks such as Alight, Inc. (NYSE:ALIT). Alight, Inc. (NYSE:ALIT) is a cloud-based integrated digital human capital and business solutions provider. The one-month return of Alight, Inc. (NYSE:ALIT) was 1.82%, and its shares lost 23.98% of their value over the last 52 weeks. On July 22, 2025, Alight, Inc. (NYSE:ALIT) stock closed at $5.58 per share, with a market capitalization of $3.06 billion.

Aristotle Capital Small Cap Equity Strategy stated the following regarding Alight, Inc. (NYSE:ALIT) in its second quarter 2025 investor letter:

"Alight, Inc. (NYSE:ALIT), operates a cloud-based platform that provides human capital management and benefits administration solutions to mostly Fortune 500 companies. We believe the company has the opportunity to grow its business through the expansion of existing client relationships along with attracting new clients to their platform. Self-help initiatives implemented by the new CEO coupled with technological enhancements to the platform are expected to streamline operational costs and improve margins on a go-forward basis."

Alight, Inc. (NYSE:ALIT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Alight, Inc. (NYSE:ALIT) at the end of the first quarter, which was 42 in the previous quarter. In the first quarter of 2025, Alight, Inc. (NYSE:ALIT) reported revenue of $548 million which was at the midpoint of guidance range. While we acknowledge the potential of Alight, Inc. (NYSE:ALIT) 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 Alight, Inc. (NYSE:ALIT) and shared the list of most undervalued stocks under $10 to buy. 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.