RXO (RXO) Traded Down as Results Fell Short of Expectations

Fred Alger Management, an investment management company, released its “Alger Weatherbie Specialized Growth Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Initial volatility in April stemmed from increased trade policy uncertainty following President Trump's tariffs on April 2, which affected import-dependent companies. Stability returned on April 9 after a 90-day pause on new duties. Market sentiment improved in May following the White House’s suspension of reciprocal tariff hikes on China on May 12. In June, trade talks—featuring faster rare-earth shipments and delayed tariffs—helped the S&P 500 reach a record high, ending Q2 with a 10.94% gain.  Class A shares of the fund outperformed the Russell 2500 Growth Index during the second quarter of 2025. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Alger Weatherbie Specialized Growth Fund highlighted stocks such as RXO, Inc. (NYSE:RXO). RXO, Inc. (NYSE:RXO) is a truck brokerage company. The one-month return of RXO, Inc. (NYSE:RXO) was -0.49%, and its shares lost 42.07% of their value over the last 52 weeks. On September 23, 2025, RXO, Inc. (NYSE:RXO) stock closed at $16.15 per share, with a market capitalization of $2.648 billion.

Alger Weatherbie Specialized Growth Fund stated the following regarding RXO, Inc. (NYSE:RXO) in its second quarter 2025 investor letter:

"RXO, Inc. (NYSE:RXO) provides transportation services primarily by connecting customers with carriers, without owning many trucks itself. It operates mainly as a broker for two types of shipping: truckload (TL), where one customer's shipment fills an entire truck, and less than-truckload (LTL), which combines smaller shipments from multiple customers into a single truck. The company also offers managed transportation services, freight forwarding, and last-mile delivery solutions. During the quarter, shares detracted from performance after the company reported weaker-than-expected revenues and earnings compared to analyst estimates. While its LTL segment performed well, the TL business experienced lower shipping volumes, despite higher revenue per shipment. While management indicated a weak April, they also highlighted encouraging progress in improving efficiency. In our view, these productivity improvements position RXO well to outperform the broader industry when market conditions improve."

RXO, Inc. (NYSE:RXO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 31 hedge fund portfolios held RXO, Inc. (NYSE:RXO) at the end of the second quarter, up from 16 in the previous quarter. While we acknowledge the potential of RXO, Inc. (NYSE:RXO) 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 RXO, Inc. (NYSE:RXO) and shared the list of best IPO stocks to buy and hold for 3 years. 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.