Here's What Hampered Eaton's (ETN) Price Rise

ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” fourth-quarter 2025 investor letter. The investment philosophy of the strategy is to invest in leading companies that are undervalued by the market in terms of their future growth potential. A copy of the letter can be downloaded here. Large-cap stocks continued their strength in the quarter, driven by strong earnings growth from mega-cap companies and enthusiasm over generative AI. The ClearBridge Large Cap Growth Strategy underperformed the Russell 1000 Growth Index by approximately 900 basis points for the year. It continued to lag behind the benchmark, trailing its 1.2% quarterly advance by about 170 basis points during the fourth quarter. The underweight exposure to mega-cap AI beneficiaries and lower-quality AI-related names contributed to the underperformance. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, ClearBridge Large Cap Growth Strategy highlighted stocks such as Eaton Corporation plc (NYSE:ETN). Eaton Corporation plc (NYSE:ETN) is a global power management company. The one-month return of Eaton Corporation plc (NYSE:ETN) was -7.90%, and its shares lost 6.50% of their value over the last 52 weeks. On January 7, 2026, Eaton Corporation plc (NYSE:ETN) stock closed at $322.67 per share, with a market capitalization of $125.615 billion.

ClearBridge Large Cap Growth Strategy stated the following regarding Eaton Corporation plc (NYSE:ETN) in its fourth quarter 2025 investor letter:

"Meanwhile, the Strategy’s more diversified exposure to AI through ownership of Eaton Corporation plc (NYSE:ETN), Accenture and Equinix did not add significant value in 2025. Eaton, a manufacturer of electrical components critical to the operation of data centers, has had supply constraints that limit its ability to vastly exceed its targeted growth rate which may also limit its ability to garner price increases."

Eaton Corporation plc (NYSE:ETN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 72 hedge fund portfolios held Eaton Corporation plc (NYSE:ETN) at the end of the third quarter, compared to 74 in the previous quarter. Eaton Corporation plc (NYSE:ETN) reported quarterly earnings of $7 billion for Q3 2025 and increased its margins by 70 basis points to reach 25%. While we acknowledge the potential of Eaton Corporation plc (NYSE:ETN) 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 Eaton Corporation plc (NYSE:ETN) and shared TCW Concentrated Large Cap Growth Fund's views on the company. In addition, please check out our hedge fund investor letters Q4 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.