Here's What Lifted Xcel Energy (XEL) in Q3

Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The US equity market continued its rally in the third quarter, with the S&P 500 Index rising 8.12% during the quarter. Bonds also finished higher in the quarter, with the Bloomberg U.S. Aggregate Bond Index increasing 2.03%. The composite returned 4.33% gross of fees (3.82% net of fees) in the third quarter, compared to a 5.33% return of the Russell 1000 Value Index and an 8.12% return of the S&P 500 Index. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Aristotle Capital Value Equity Strategy highlighted stocks such as Xcel Energy Inc. (NASDAQ:XEL). Xcel Energy Inc. (NASDAQ:XEL) engages in the generation, purchase, transmission, and distribution of electricity. The one-month return of Xcel Energy Inc. (NASDAQ:XEL) was 13.34%, and its shares gained 29.33% of their value over the last 52 weeks. On October 15, 2025, Xcel Energy Inc. (NASDAQ:XEL) stock closed at $81.80 per share, with a market capitalization of $48.379 billion.

Aristotle Capital Value Equity Strategy stated the following regarding Xcel Energy Inc. (NASDAQ:XEL) in its third quarter 2025 investor letter:

"Xcel Energy Inc. (NASDAQ:XEL), one of the largest renewable energy owners among regulated utilities, was a primary contributor during the period. Shares rose after the company announced comprehensive settlements totaling $640 million related to the 2021 Marshall Fire in Colorado, with $350 million of the total to be covered by insurance. Although material, the settlement was well below worst-case estimates and removed a significant legal overhang. Fire risk is a challenge facing all western utilities, and Xcel has taken proactive steps to mitigate exposure. Regulators recently approved a $1.9 billion wildfire mitigation plan in Colorado and a $500 million resiliency plan in Texas, both of which strengthen the grid and reduce liability risk. Looking ahead, we believe Xcel is well-positioned to benefit from rising demand for clean energy and electrification. The company’s five-year capital plan totals $45 billion, much of it directed toward renewable energy projects and electric grid infrastructure to support clean energy, as its service territories offer some of the best wind and solar resources in the country and are supported by state policies accelerating the transition away from coal. We believe these investments will strengthen Xcel’s clean energy leadership, expand its transmission capacity, and support higher normalized earnings and dividends."

Xcel Energy Inc. (NASDAQ:XEL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 47 hedge fund portfolios held Xcel Energy Inc. (NASDAQ:XEL) at the end of the second quarter, up from 42 in the previous quarter. Xcel Energy Inc. (NASDAQ:XEL) delivered earnings of $0.75 per share for Q2 2025 compared to earnings of $0.54 per share in Q2 2024. While we acknowledge the potential of Xcel Energy Inc. (NASDAQ:XEL) 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 addition, please check out our hedge fund investor letters Q3 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.