Rowan Street Capital on Its New Addition to Tesla (TSLA)

Rowan Street Capital, an investment management company, has recently released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund remained unchanged in the third quarter (+0.22%), making the YTD returns through September 30, 2025, to +20.4% net of fees compared to the S&P 500’s +14.8% year-to-date gain. Over the past three years, the firm’s capital compounded at approximately +54.2% annually (net), delivering a +266% cumulative return — more than doubling the S&P 500’s +24.9% annualized gain over the same period. The fund’s performance was driven by its commitment to process refined through years of experience, mistakes, and reflection. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its third-quarter 2025 investor letter, Rowan Street Capital highlighted stocks such as Tesla, Inc. (NASDAQ:TSLA). Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, as well as energy generation and storage systems. The one-month return of Tesla, Inc. (NASDAQ:TSLA) was 1.82%, and its shares gained 65.51% of their value over the last 52 weeks. On October 22, 2025, Tesla, Inc. (NASDAQ:TSLA) stock closed at $438.97 per share, with a market capitalization of $1.46 trillion.

Rowan Street Capital stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its third quarter 2025 investor letter:

"Tesla, Inc. (NASDAQ:TSLA) is our newest idea, which we’ll discuss in detail later in the letter. Since initiating the position earlier this year, it has appreciated roughly 76%. While we’ve only owned it for seven months and it’s too early to determine what kind of IRR it w ultimately deliver, Tesla embodies exactly the type of founder-led, competitively advantaged business we aim to own for many years.

In 2025, we made just one new investment — Tesla — during a period of widespread pessimism. Back in March and April, sentiment around the company and its CEO was near rock bottom. Headlines were dominated by controversy, and investors were fleeing what they perceived as chaos. We saw an opportunity..." (Click here to read the full text)

Tesla, Inc. (NASDAQ:TSLA) is in the 23rd position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 115 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the second quarter, up from 104 in the previous quarter. While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) 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 Tesla, Inc. (NASDAQ:TSLA) and shared the list of best revenue growth stocks to invest in. 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.