Should You Hold Diamondback Energy (FANG) for the Long Term?

Artisan Partners, an investment management company, released its “Artisan Value Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets faced significant volatility in the second quarter, fueled by the announcement and subsequent pause of the "Liberation Day" tariffs. Against this backdrop, the fund’s Investor Class ARTLX, Advisor Class APDLX, and Institutional Class APHLX returned 5.99%, 5.96%, and 5.96%, respectively, in the second quarter compared to a 3.79% return for the Russell 1000® Value Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its second-quarter 2025 investor letter, Artisan Value Fund highlighted stocks such as Diamondback Energy, Inc. (NASDAQ:FANG). Diamondback Energy, Inc. (NASDAQ:FANG) is an independent oil and natural gas company. The one-month return of Diamondback Energy, Inc. (NASDAQ:FANG) was -5.11%, and its shares lost 28.09% of their value over the last 52 weeks. On August 20, 2025, Diamondback Energy, Inc. (NASDAQ:FANG) stock closed at $137.87 per share, with a market capitalization of $39.911 billion.

Artisan Value Fund stated the following regarding Diamondback Energy, Inc. (NASDAQ:FANG) in its second quarter 2025 investor letter:

"Our energy holdings Schlumberger and Diamondback Energy, Inc. (NASDAQ:FANG) were key detractors. Unlike most equity sectors that recovered a significant proportion of their early-April declines after reciprocal tariffs were paused, the rebound among energy stocks was muted. The sector has been held back by falling oil prices as concerns about the impact of tariffs and general macro uncertainty on oil demand drove the price of WTI crude oil below $60 in May, its lowest level in four years. Oil prices have generally been trending down since 2022. While we understand the short-term concerns weighing on the sector, our interest remains on the long-term economics and valuations of our individual portfolio companies. Diamondback Energy, which we purchased in Q42024, is an oil and gas producer operating in the Permian Basin of the southwestern US. When investing in oil and gas exploration and production companies, we are highly selective. Not only do producers have no control over the underlying commodity prices, but they frequently prioritize capital expenditures over cash flow. Diamondback’s core operating philosophy is that the low-cost producer in a commodity market wins. Diamondback has a strong cost profile that is primarily the result of a contiguous, high-quality acreage position in the Permian Basin. The company’s culture supplements the acreage position with drilling discipline and conservative business plans. Our thesis is simple: Diamondback is an efficient Permian operator committed to a strong balance sheet and shareholder distributions."

Diamondback Energy, Inc. (NASDAQ:FANG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held Diamondback Energy, Inc. (NASDAQ:FANG) at the end of the first quarter, which was 53 in the previous quarter.  While we acknowledge the potential of Diamondback Energy, Inc. (NASDAQ:FANG) 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 Diamondback Energy, Inc. (NASDAQ:FANG) and shared the list of best aggressive growth stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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