Should You Invest in Pinnacle West Capital (PNW)?

Aristotle Capital Boston, LLC, an investment advisor, released its “Small/Mid Cap Equity Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. small/mid-cap equities reported solid results in the third quarter, driven by a favorable macroeconomic backdrop. In the third quarter, the strategy delivered a return of 2.57% net of fees (3.07% gross of fees), underperforming the 9.00% total return of the Russell 2500 Index. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its third-quarter 2025 investor letter, Aristotle Capital Small/Mid Cap Equity Strategy highlighted stocks such as Pinnacle West Capital Corporation (NYSE:PNW). Pinnacle West Capital Corporation (NYSE:PNW) is a retail and wholesale electric services provider primarily in the state of Arizona. The one-month return of Pinnacle West Capital Corporation (NYSE:PNW) was -3.53%, and its shares gained 2.22% of their value over the last 52 weeks. On October 31, 2025, Pinnacle West Capital Corporation (NYSE:PNW) stock closed at $88.52 per share, with a market capitalization of $10.572 billion.

Aristotle Capital Small/Mid Cap Equity Strategy stated the following regarding Pinnacle West Capital Corporation (NYSE:PNW) in its third quarter 2025 investor letter:

"Pinnacle West Capital Corporation (NYSE:PNW), is an Arizona-based, vertically integrated electric utility company serving central Arizona. Population migration and the expansion of industrial manufacturing within the Phoenix metropolitan area is driving increased energy demand and capital investment opportunities for the company. An improving regulatory backdrop in Arizona should also allow for reduced earnings volatility and accelerated cost recovery moving forward."

Pinnacle West Capital Corporation (NYSE:PNW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 41 hedge fund portfolios held Pinnacle West Capital Corporation (NYSE:PNW) at the end of the second quarter, up from 40 in the previous quarter. While we acknowledge the potential of Pinnacle West Capital Corporation (NYSE:PNW) 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 Pinnacle West Capital Corporation (NYSE:PNW) and shared the list of best electric utility stocks to buy according to analysts. 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.