PepsiCo (PEP) is in the Crosshairs of Weight Loss Drugs

Fundsmith, an investment management firm based in London, has released its annual 2025 investor letter for its “Fundsmith Equity Fund.” A copy of the letter can be downloaded here. The fund focuses on investing in equities globally. The T Class Accumulation shares where the firm invested returned 0.8% in 2025, compared to 12.8% for the MSCI World Index (‘Index’) in sterling with dividends reinvested. Since its inception, the fund has returned 1.7% p.a. more than the index. The fund attributed its underperformance during 2025 to index concentration, the growth of assets in Index Funds, and weakness in the dollar. In addition, please check the fund’s top five holdings to know its best picks in 2025.

 In its fourth-quarter 2025 investor letter, Fundsmith Equity Fund highlighted stocks such as PepsiCo, Inc. (NASDAQ:PEP). PepsiCo, Inc. (NASDAQ:PEP) is an American multinational company that manufactures and distributes various beverages and convenient foods. The one-month return of PepsiCo, Inc. (NASDAQ:PEP) was -5.99%, and its shares lost 2.48% of their value over the last 52 weeks. On January 12, 2026, PepsiCo, Inc. (NASDAQ:PEP) stock closed at $141.36 per share, with a market capitalization of $193.533 billion.

Fundsmith Equity Fund stated the following regarding PepsiCo, Inc. (NASDAQ:PEP) in its fourth quarter 2025 investor letter:

"Brown-Forman and PepsiCo, Inc.'s (NASDAQ:PEP) snack business seem to us to be directly in the crosshairs of the impact of reduced appetites from weight loss drugs. Whether or not our Novo Nordisk investment finally comes good, we believe that weight loss drugs and their impact are here to stay. In addition, the alcoholic drinks business faces headwinds from the impact of Generation Z’s drinking habits (lack of) and the legalisation of cannabis."

PepsiCo, Inc. (NASDAQ:PEP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 68 hedge fund portfolios held PepsiCo, Inc. (NASDAQ:PEP) at the end of the third quarter, the same as in the previous quarter. While we acknowledge the potential of PepsiCo, Inc. (NASDAQ:PEP) 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 PepsiCo, Inc. (NASDAQ:PEP) and shared the list of best consumer staples dividend stocks to invest in. 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.