Roblox Corporation (RBLX) Surged in Q2. Here's Why

Sands Capital, an investment management company, released its “Sands Capital Select Growth Strategy” Q2 2025 investor letter. A copy of the letter can be downloaded here.  U.S. large-cap growth equities recovered from a sharp sell-off in early April by delivering strong returns in the second quarter. The quarterly performance was driven by muted inflation, strong corporate earnings, and improving sentiment around artificial intelligence (AI) and global trade. The portfolio returned 27.7% in the quarter, outperforming the benchmark Russell 1000 Growth Index’s 17.8% gain. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its second-quarter 2025 investor letter, Sands Capital Select Growth Strategy highlighted stocks such as Roblox Corporation (NYSE:RBLX). Roblox Corporation (NYSE:RBLX) is an immersive platform for connection and communication. The one-month return of Roblox Corporation (NYSE:RBLX) was 15.87%, and its shares gained 199.63% of their value over the last 52 weeks. On September 15, 2025, Roblox Corporation (NYSE:RBLX) stock closed at $137.26 per share, with a market capitalization of $94.863 billion.

Sands Capital Select Growth Strategy stated the following regarding Roblox Corporation (NYSE:RBLX) in its second quarter 2025 investor letter:

"Roblox Corporation (NYSE:RBLX) is a leading platform for game development and distribution. First-quarter results showed a reacceleration across several key metrics, including daily active users, bookings, and hours played. These gains were broad-based across regions and included the strongest sequential increase in hours played since 2020. Roblox also demonstrated significant operating leverage, with EBITDA margins expanding by 760 basis points year over year, reaching 17 percent—the highest level since 2021. Company guidance points to continued margin expansion through year-end, potentially resulting in $1 billion in free cash flow in 2025. Following these results, real-time data indicated the emergence of a new hit game, reinforcing a core strength of the Roblox platform: frictionless creation of user-generated content and global distribution."

Roblox Corporation (NYSE:RBLX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 75 hedge fund portfolios held Roblox Corporation (NYSE:RBLX) at the end of the second quarter, which was 68 in the previous quarter.  In Q2 2025, Roblox Corporation’s (NYSE:RBLX) revenue grew 21% year-on-year to $1.1 billion. While we acknowledge the potential of Roblox Corporation (NYSE:RBLX) 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 Roblox Corporation (NYSE:RBLX) and shared ClearBridge Mid Cap Growth Strategy'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.