Here's Why Brown Advisory Mid-Cap Growth Strategy Initiated a Stake in DraftKings (DKNG)

Brown Advisory, an investment management company, released its “Brown Advisory Mid-Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The strategy underperformed its benchmark, the Russell Midcap® Growth Index, in the second quarter of 2025, which increased approximately 3%.  In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Brown Advisory Mid-Cap Growth Strategy highlighted stocks such as DraftKings Inc. (NASDAQ:DKNG). DraftKings Inc. (NASDAQ:DKNG) is a digital sports entertainment and gaming company. The one-month return of DraftKings Inc. (NASDAQ:DKNG) was 17.41%, and its shares lost 13.58% of their value over the last 52 weeks. On December 17, 2025, DraftKings Inc. (NASDAQ:DKNG) stock closed at $34.05 per share, with a market capitalization of $16.949 billion.

Brown Advisory Mid-Cap Growth Strategy stated the following regarding DraftKings Inc. (NASDAQ:DKNG) in its third quarter 2025 investor letter:

"We initiated a position in DraftKings Inc. (NASDAQ:DKNG) to gain exposure to the fast-growing online sports betting and iCasino markets, where DraftKings and FanDuel have established a strong duopoly. We expect this dominant position to support expanding unit economics and faster growth as additional states legalize online wagering."

DraftKings Inc. (NASDAQ:DKNG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 68 hedge fund portfolios held DraftKings Inc. (NASDAQ:DKNG) at the end of the third quarter, up from 66 in the previous quarter. In the third quarter 2025, DraftKings Inc. (NASDAQ:DKNG) generated $1.144 billion of revenue, representing a 4% year-over-year growth. While we acknowledge the potential of DraftKings Inc. (NASDAQ:DKNG) 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 DraftKings Inc. (NASDAQ:DKNG) and shared the list of stocks Jim Cramer discussed. 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.