What Makes Baker Hughes (BKR) a Good Investment?

Aristotle Atlantic Partners, LLC, an investment advisor, released its “Core Equity Strategy” third-quarter 2025 investor letter. The letter highlighted the market review, quarterly performance, and attribution analysis. A copy of the letter can be downloaded here. In the quarter, the US equity market rallied, with the S&P 500 Index reaching 8.12%. Bonds also finished higher in the period, with the Bloomberg U.S. Aggregate Bond Index increasing 2.03%. The composite has returned 7.22% gross of fees (7.10% net of fees) in the quarter, underperforming the S&P 500 Index’s 8.12% gain. Security selection led to the relative underperformance of the strategy in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Aristotle Atlantic Core Equity Strategy highlighted stocks such as Baker Hughes Company (NASDAQ:BKR. Baker Hughes Company (NASDAQ:BKR) is a global provider of technologies and services to the energy and industrial value chain. The one-month return of Baker Hughes Company (NASDAQ:BKR) was 5.16%, and its shares gained 10.64% of their value over the last 52 weeks. On November 13, 2025, Baker Hughes Company (NASDAQ:BKR) stock closed at $47.51 per share, with a market capitalization of $46.882 billion.

Aristotle Atlantic Core Equity Strategy stated the following regarding Baker Hughes Company (NASDAQ:BKR) in its third quarter 2025 investor letter:

"Baker Hughes Company (NASDAQ:BKR) is an energy technology firm with a diverse portfolio of technologies and services spanning the energy and industrial value chain. The company operates through two main segments: Industrial & Energy Technology (IET) and Oilfield Services & Equipment (OFSE). The IET segment offers a wide range of domain expertise, technologies, software and services for energy and industrial customers, including solutions for clean power, geothermal, hydrogen and emissions abatement. The OFSE segment designs and manufactures products and provides services for onshore and offshore oilfield operations, while also expanding its capabilities to address the energy transition.

We believe Baker Hughes is well-positioned to capitalize on the rising global demand for natural gas and LNG projects, benefiting from its LNG franchise and critical turbomachinery. The company is also improving its margins and cash flow conversion, with EBITDA margins projected to be high teens in 2025 and targeting ~20%+ over the next few years. Additionally, Baker Hughes is accelerating its AI data center power infrastructure buildout, leveraging its NovaLT series gas turbines. The company's diversified business model, including its industrial technology arm, provides stable revenue streams. The acquisition of Chart Industries enhances its IET strategy, creating a comprehensive offering in high-growth areas. Lastly, Baker Hughes' backlog provides multi-year revenue visibility. We believe that the current valuation is attractive based on accelerating growth opportunities from the company’s IET segment and the associated higher-margin aftermarket services business."

Baker Hughes Company (NASDAQ:BKR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held Baker Hughes Company (NASDAQ:BKR) at the end of the second quarter, which was 50 in the previous quarter. In the third quarter of 2025, Baker Hughes Company’s (NASDAQ:BKR) adjusted EBITDA rose 2% year-over-year to $1.24 billion. While we acknowledge the potential of Baker Hughes Company (NASDAQ:BKR) 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 Baker Hughes Company (NASDAQ:BKR) and shared the list of most undervalued dividend stocks to buy according to Wall Street 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.