What Makes Vertex Pharmaceuticals (VRTX) an Investment Bet?

ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equities continued their upward journey in the third quarter with the S&P 500 Index surging 8.1% and tech-heavy Nasdaq Composite rising 11.2% to record highs. Investor optimism was driven by favorable tariff results, the One Big Beautiful Bill in July, expected interest rate cuts, and strong corporate earnings, particularly in technology and the Magnificent Seven. The benchmark Russell 1000 Growth Index rose 10.5% for the quarter. The strategy delivered solid absolute performance in the quarter but underperformed the benchmark. Underexposure to perceived AI winners and holding several names deemed by investors to be AI losers led to the underperformance. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, ClearBridge Large Cap Growth Strategy highlighted stocks such as Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a biotechnology company focusing on developing and commercializing therapies for treating cystic fibrosis (CF). The one-month return of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) was 1.81%, and its shares lost 11.42% of their value over the last 52 weeks. On October 3, 2025, Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) stock closed at $403.30 per share, with a market capitalization of $103.402 billion.

ClearBridge Large Cap Growth Strategy stated the following regarding Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) in its third quarter 2025 investor letter:

"We upgraded our biopharmaceutical exposure with the purchase of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), a high-quality biotech with a leading franchise in cystic fibrosis. We have been following the company for some time and see its pain treatments as its next big opportunity. Some disappointments in the timing of clinical trials for chronic pain enabled us to establish a position at what we view as a moderate valuation relative to its pipeline."

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 53 hedge fund portfolios held Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) at the end of the second quarter, which was 60 in the previous quarter. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) delivered $2.96 billion in revenue in the second quarter, representing a 12% growth compared to Q2 2024. While we acknowledge the potential of Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) 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 Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) and shared the list of best biotech stocks to buy. 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.