Aristotle Growth Equity Fund Bets on DexCom (DXCM) Due to Its Expanding CGM Market Leadership

Aristotle Funds, an investment advisor, released its “Growth Equity Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index rising 2.66% and the Bloomberg U.S. Aggregate Bond Index increasing by 1.10%. Within the Russell 1000 Growth Index, healthcare, communication services, and financials were the top-performing sectors, while utilities, real estate, and materials lagged. The U.S. economy showed resilience. However, consumer confidence deteriorated toward year-end, raising concerns about future spending and the labor market. Against this backdrop, the Aristotle Growth Equity Fund (Class I-2) returned 0.95%, underperforming the Russell 1000 Growth Index’s 1.12%. Poor security selection in the information technology and consumer discretionary sectors detracted from performance, while positive contributions from healthcare and industrials improved relative performance. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Aristotle Growth Equity Fund highlighted stocks like DexCom, Inc. (NASDAQ:DXCM). DexCom, Inc. (NASDAQ:DXCM) is a medical device company that focuses on developing continuous glucose monitoring (CGM) systems for diabetes and metabolic health management. On February 25, 2026, DexCom, Inc. (NASDAQ:DXCM) stock closed at $73.16 per share. One-month return of DexCom, Inc. (NASDAQ:DXCM) was -1.14%, and its shares lost 16.68% over the past 52 weeks. DexCom, Inc. (NASDAQ:DXCM) has a market capitalization of $28.534 billion.

Aristotle Growth Equity Fund stated the following regarding DexCom, Inc. (NASDAQ:DXCM) in its fourth quarter 2025 investor letter:

"DexCom, Inc. (NASDAQ:DXCM) is a leading medical device company specializing in the design and development of continuous glucose monitoring (CGM) systems for people with diabetes. Founded in 1999, DexCom has pioneered innovative technology such as the implantable sensor and external receiver, empowering individuals to track and manage their glucose levels more effectively. Its key products, including the Dexcom G7 CGM system and Stelo Glucose Biosensor, serve a wide range of users from those with Type 1 or Type 2 diabetes to adults with prediabetes, and are marketed primarily to health care professionals in the U.S. and select international markets.

We see DexCom as representing a compelling investment opportunity due to its leadership in the rapidly expanding CGM market, supported by strong reimbursement trends, growing patient coverage, and ongoing product innovation such as the transition to the G7 system and the upcoming 15-day sensor. With low penetration rates among both Type 1 and Type 2 diabetes patients and significant untapped markets in the U.S. and internationally, DexCom is well-positioned for sustained growth. The company’s successful launch of Stelo for non-diabetics, robust new patient growth, clean balance sheet, and guidance for double-digit organic revenue and earnings growth further reinforce its attractive outlook for investors. DexCom trades at a price-to-forward earnings per share multiple that, while higher than the overall market, is lower than the company’s historical average. Furthermore, we believe this premium valuation is justified by their large and expanding total addressable market and their strong growth potential."

DexCom, Inc. (NASDAQ:DXCM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 71 hedge fund portfolios held DexCom, Inc. (NASDAQ:DXCM) at the end of the fourth quarter, the same as in the previous quarter. While we acknowledge the potential of DexCom, Inc. (NASDAQ:DXCM) 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 DexCom, Inc. (NASDAQ:DXCM) and shared a list of best Internet of Things (IoT) stocks to buy. 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.