Align Technology (ALGN) Rose Following the Pause of Reciprocal Tariffs

Artisan Partners, an investment management company, released its “Artisan Mid Cap Value Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund’s Investor Class fund ARTQX returned 0.26%, Advisor Class fund APDQX posted a return of 0.26%, and Institutional Class fund APHQX returned 0.33%, compared to a 5.35% return for the Russell Midcap Value Index. Equity markets experienced heightened volatility followed by the announcement and subsequent pause of the so-called “Liberation Day” tariffs. The portfolio underperformed in the quarter due to the market’s preference for growth and the outperformance of more cyclical sectors and industries. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Artisan Mid Cap Value Fund highlighted stocks such as Align Technology, Inc. (NASDAQ:ALGN). Align Technology, Inc. (NASDAQ:ALGN) designs, manufactures, and markets Invisalign clear aligners and iTero intraoral scanners and services. The one-month return of Align Technology, Inc. (NASDAQ:ALGN) was 9.39%, and its shares lost 39.98% of their value over the last 52 weeks. On August 27, 2025, Align Technology, Inc. (NASDAQ:ALGN) stock closed at $141.13 per share, with a market capitalization of $10.23 billion.

Artisan Mid Cap Value Fund stated the following regarding Align Technology, Inc. (NASDAQ:ALGN) in its second quarter 2025 investor letter:

"There’s an oft-repeated phrase by investors, “You can have good news, or you can have good prices, but you can’t have both.” While falling markets can be uncomfortable while they are occurring, we’ve seen time and time again that these periods can present favorable buying opportunities. In Q2, Liberation Day tariffs were the metaphorical bad news that created good prices. In fact, the steep drop in the stock market presented us with an opportunity to be much more active than we had been for some time. In April, we made four new purchases, which compares to just one in the entire Q1. In addition to adding Pinterest and Ferguson in April, we also initiated new positions in Align Technology, Inc. (NASDAQ:ALGN) and CDW.

Align Technology (ALGN) is a medical device company known for its Invisalign clear aligners used in orthodontics. We purchased ALGN on April 4—two days after Liberation Day tariffs caused equity markets to sell off. We had been doing work on ALGN prior to the volatility, so the market turmoil that ensued gave us an opportunity to add what we believe is a high-quality business with a bright future at a reasonable price. We initiated our position at $150 per share. It was selling for over $300 as recently as April 2024 and for more than $700 when ALGN was seen as a “COVID winner” during its hyper-growth phase in 2021. ALGN is a case of a former growth darling that lost its luster when growth decelerated. Invisalign is the market leader in clear aligners, the alternative to traditional braces. The pull forward during COVID dampened subsequent event trends, and higher consumer financing costs have been an additional headwind to sales. More recent concerns center around emerging low-end competition and falling consumer confidence, particularly as recession risks have increased. We don’t have a strong view on near-term growth inflecting higher, but longer term, we believe clear aligners, which are just ~20% of the more than 20 million new orthodontia cases annually, can continue to take share. Invisalign is a premium brand that orthodontists trust, so we see less risk from new entrants that compete mainly on price. Shares rebounded strongly after the reciprocal tariffs were paused."

Align Technology, Inc. (NASDAQ:ALGN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Align Technology, Inc. (NASDAQ:ALGN) at the end of the second quarter, which was 52 in the previous quarter. For Q2 2025, Align Technology, Inc.'s (NASDAQ:ALGN) total revenues were $1,012.4 million, up 3.4% sequentially and down 1.6% year-over-year. While we acknowledge the potential of Align Technology, Inc. (NASDAQ:ALGN) 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 Align Technology, Inc. (NASDAQ:ALGN) and shared the list of oversold value stocks to invest in. 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.