Parnassus Core Equity Fund Sold D.R. Horton (DHI) Due to Uncertain Housing Demand

Parnassus Investments, an investment management company, released the “Parnassus Core Equity Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund (Investor Shares) fell -2.44% (net of fees) in the quarter, outperforming the S&P 500 Index’s -4.27% return. U.S. equities fell in the first quarter, showing a shift from the robust gains of the previous quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Parnassus Core Equity Fund highlighted stocks such as D.R. Horton, Inc. (NYSE:DHI). D.R. Horton, Inc. (NYSE:DHI) is a homebuilding company. The one-month return of D.R. Horton, Inc. (NYSE:DHI) was 7.70%, and its shares lost 9.78% of their value over the last 52 weeks. On June 26, 2025, D.R. Horton, Inc. (NYSE:DHI) stock closed at $127.15 per share, with a market capitalization of $39.058 billion.

Parnassus Core Equity Fund stated the following regarding D.R. Horton, Inc. (NYSE:DHI) in its Q1 2025 investor letter:

"We also repositioned to increase our underweight in Consumer Discretionary by selling homebuilder D.R. Horton, Inc. (NYSE:DHI) amid uncertainty and increasing risk to housing fundamentals. D.R. Horton’s cycle risk is now more accurately priced in. Additionally, housing demand prospects in the areas where the company operates remain uncertain."

D.R. Horton, Inc. (NYSE:DHI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held D.R. Horton, Inc. (NYSE:DHI) at the end of the first quarter, which was 60 in the previous quarter. In the fiscal second quarter of 2025, D.R. Horton, Inc. (NYSE:DHI) reported revenue of $7.7 billion, down 15% from prior year's quarter. While we acknowledge the potential of D.R. Horton, Inc. (NYSE:DHI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered D.R. Horton, Inc. (NYSE:DHI) and shared the list of stocks Jim Cramer recently discussed. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of DHI 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.

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Disclosure: None. This article is originally published at Insider Monkey.