Has Revolution Medicines (RVMD) Found a Breakthrough in Cancer Treatment?

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 Revolution Medicines, Inc. (NASDAQ:RVMD). Revolution Medicines, Inc. (NASDAQ:RVMD) is a clinical-stage precision oncology company that develops therapies for RAS-addicted cancers. On February 25, 2026, Revolution Medicines, Inc. (NASDAQ:RVMD) stock closed at $103.24 per share. One-month return of Revolution Medicines, Inc. (NASDAQ:RVMD) was 5.13%, and its shares gained 164.18% over the past 52 weeks. Revolution Medicines, Inc. (NASDAQ:RVMD) has a market capitalization of $19.958 billion.

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

"Revolution Medicines, Inc. (NASDAQ:RVMD) is a company focused on developing new treatments for cancer, specifically for patients whose cancers are driven by changes in RAS proteins. Their research and development is centered on creating drugs called RAS(ON) inhibitors, which aim to block the growth signals from these proteins. The company’s main drugs—Daraxonrasib, Elironrasib, and Zoldonrasib—are already being tested in clinical trials. Revolution Medicines is working on bringing a new drug, RMC-5127, into trials soon. In addition, the company is developing more targeted treatments for other types of RAS mutations.

We see Revolution as presenting a compelling investment case driven by the robust clinical performance of its lead candidate, Daraxonrasib (RMD-6236), currently in phase 3 trials for advanced non-small cell lung cancer (NSCLC) and pancreatic ductal adenocarcinoma (PDAC). The drug has demonstrated impressive efficacy in hard-to-treat cancers, with high objective response and disease control rates, significantly outperforming existing standard treatments. Daraxonrasib’s U.S. Food and Drug Administration (FDA) Breakthrough Therapy Designation and inclusion in the FDA Commissioner’s National Priority Review Voucher program highlight its promise and potential for accelerated approval. With ongoing expansion into earlier lines of therapy and multiple combination studies in solid tumors, as well as a pipeline of additional agents in development, Revolution is well positioned for future growth and value creation in the oncology space. As a clinical-stage biotechnology company, valuation can be challenging given no commercial products. Sell-side analysts have projected that Daraxonrasib’s PDAC-only revenue could reach several billion dollars by the mid-2030s. This would result in a current value that is just over one times potential peak revenue, which is lower than the multiple typically seen in historical biotech merger & acquisition transactions."

Revolution Medicines, Inc. (NASDAQ:RVMD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 85 hedge fund portfolios held Revolution Medicines, Inc. (NASDAQ:RVMD) at the end of the fourth quarter, up from 71 in the previous quarter. While we acknowledge the potential of Revolution Medicines, Inc. (NASDAQ:RVMD) 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 Revolution Medicines, Inc. (NASDAQ:RVMD) and shared a list of undervalued momentum stocks that are taking off. 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.