What Makes Chipotle Mexican Grill (CMG) a Robust Long-Term Holding?

Tapasya Fund, an investment management company, released its fourth quarter 2025 investor letter. A copy of the letter can be downloaded here. The firm celebrated its third anniversary in August 2025 and is happy with the fund’s performance. In 2025, the fund performed well and achieved strong absolute returns, outpacing the S&P 500 and several other market indices. The year was marked by notable developments, especially related to tariffs, which led to substantial fluctuations in the market. There was a swift correction in April, followed by a robust rebound. The theme Artificial Intelligence (AI) has played a crucial role in supporting the market through times of volatility to reach new peaks, reaching over 38 new all-time highs this year. Against this backdrop, the fund returned 23.5% (net) in 2025 compared to a 17.9% return for the S&P 500 Index (with Dividends). The firm's goal is to avoid any sector-specific bubble bursts, reducing the effect on the portfolio beyond general market downturns. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Tapasya Fund highlighted stocks such as Chipotle Mexican Grill, Inc. (NYSE:CMG). Chipotle Mexican Grill, Inc. (NYSE:CMG) owns and operates Chipotle Mexican Grill restaurants. The one-month return of Chipotle Mexican Grill, Inc. (NYSE:CMG) was 8.41%, and its shares lost 30.65% of their value over the last 52 weeks. On January 8, 2026, Chipotle Mexican Grill, Inc.  (NYSE:CMG) stock closed at $39.18 per share, with a market capitalization of $52.536 billion.

Tapasya Fund stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its fourth quarter 2025 investor letter:

"Chipotle Mexican Grill, Inc. (NYSE:CMG): Chipotle's performance in 2025 was disappointing, primarily due to heightened competition and margin pressure resulting from increased labor and food costs that outpaced menu price increases. The market punished the stock for a temporary slowdown in same-store sales growth. Despite this challenging year, our conviction in CMG as a long-term holding remains robust. The company maintains a strong brand, superior unit economics, and a clear runway for expansion. We view the current market pessimism as a buying opportunity and intend to treat CMG as a foundational, multi-year holding."

Chipotle Mexican Grill, Inc.  (NYSE:CMG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held Chipotle Mexican Grill, Inc. (NYSE:CMG) at the end of the third quarter, which was 68 in the previous quarter. Chipotle Mexican Grill, Inc.’s (NYSE:CMG) sales for the third quarter of 2025 grew 7.5% to reach $3 billion. While we acknowledge the potential of Chipotle Mexican Grill, Inc. (NYSE:CMG) 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 Chipotle Mexican Grill, Inc. (NYSE:CMG) and shared ClearBridge Large Cap Growth Strategy'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.