Here's What Dragged Thermo Fisher Scientific (TMO) in Q2

Renaissance Investment Management, an investment management company, released its Q2 2025 “Large Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. The stock market experienced significant volatility in the second quarter, and yet, the S&P 500 posted an all-time high by the end of June. The liberation day tariff announcement set off havoc in the market, causing stock prices to drop 7% from April 2 to April 7. However, the market rebounded and gained more than 22% from the April 7 low through the end of June. The Russell 1000 Growth returned 17.8% and the S&P 500 returned 10.9% in the quarter. Large caps significantly outperformed their small-cap counterparts, and growth outperformed value. Against this backdrop, the strategy outperformed the S&P 500 Index but underperformed the Russell 1000 Growth benchmark. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, Renaissance Large Cap Growth Strategy highlighted stocks such as Thermo Fisher Scientific Inc. (NYSE:TMO). Thermo Fisher Scientific Inc. (NYSE:TMO) offers life sciences solutions, analytical instruments, specialty diagnostics, laboratory products, and biopharma services. The one-month return of Thermo Fisher Scientific Inc. (NYSE:TMO) was -0.11%, and its shares lost 21.70% of their value over the last 52 weeks. On September 09, 2025, Thermo Fisher Scientific Inc. (NYSE:TMO) stock closed at $487.65 per share, with a market capitalization of $182.859 billion.

Renaissance Large Cap Growth Strategy stated the following regarding Thermo Fisher Scientific Inc. (NYSE:TMO) in its second quarter 2025 investor letter:

"Thermo Fisher Scientific Inc. (NYSE:TMO) was another underperformer, declining 18.5% despite reporting solid operating results. In addition, the company lowered full-year guidance on tariff-related macro weakness and introduced uncertainty related to National Institute of Health (NIH) funding delays that have negatively impacted its academic and government customers.

We sold our position in Thermo Fisher Scientific (TMO) following a deterioration in fundamental factors. We believe that current estimates for the company leave little room for positive earnings revisions. While the company’s life sciences segment has returned to positive organic growth, the company’s largest segment, lab products, is only beginning to face growth headwinds as large Contract Research Organization (CRO) customers are negatively impacted by DOGE-related spending cuts. In addition, an increase in budgetary uncertainty has pres sured government and academic customers, resulting in an abrupt slowdown in orders from what had historically been a stable customer base."

Thermo Fisher Scientific Inc. (NYSE:TMO) is in 26th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 117 hedge fund portfolios held Thermo Fisher Scientific Inc. (NYSE:TMO) at the end of the second quarter, which was 101 in the previous quarter. Thermo Fisher Scientific Inc.’s (NYSE:TMO) revenue in the second quarter grew 3% to $10.85 billion. While we acknowledge the potential of Thermo Fisher Scientific Inc. (NYSE:TMO) 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 Thermo Fisher Scientific Inc. (NYSE:TMO) and shared Loomis Sayles Growth 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.