Here's AMG Frontier Small Cap Growth Fund's Comment on FTAI Aviation Ltd. (FTAI)

Frontier Capital Management, an investment management company, released its “Frontier Small Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Class N shares of the fund returned -14.43% in the first quarter, compared to -11.12% for the benchmark Russell 2000 Growth Index. The fund returned -14.50% for the 12 months ended March 31, 2025, compared to the benchmark return of -4.86%. US equities traded lower in the first quarter, mainly during the last week of the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first quarter 2025 investor letter, Frontier Small Cap Growth Fund highlighted stocks such as FTAI Aviation Ltd. (NASDAQ:FTAI). FTAI Aviation Ltd. (NASDAQ:FTAI) owns and acquires aviation equipment for the transportation of goods and people. The one-month return of FTAI Aviation Ltd. (NASDAQ:FTAI) was -11.01%, and its shares gained 8.74% of their value over the last 52 weeks. On July 03, 2025, FTAI Aviation Ltd. (NASDAQ:FTAI) stock closed at $114.95 per share with a market capitalization of $11.79 billion.

Frontier Small Cap Growth Fund stated the following regarding FTAI Aviation Ltd. (NASDAQ:FTAI) in its first quarter 2025 investor letter:

"A second industrial underperformer was FTAI Aviation Ltd. (NASDAQ:FTAI), which has been one of our top contributors over the past couple of years. In January, a hedge fund published a short report asserting that FTAI had inflated its earnings through dubious accounting practices. The stock plummeted on the news, but we felt confident those claims were without merit. This event triggered the company to hire an independent auditor to review its accounting practices. During this time, we added to the position at lower prices where it presented a very attractive risk/reward given our confidence in the company’s business model, growth opportunities, and understanding of its accounting practices. As it stands today, the investigation by the independent auditors has been completed with findings of no wrongdoing by FTAI, no accounting restatements, no delay in any Securities and Exchange Commission (SEC) filings, and no changes to earnings projections. We anticipate many years of strong growth ahead and have maintained a significant portfolio position."

FTAI Aviation Ltd. (NASDAQ:FTAI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held FTAI Aviation Ltd. (NASDAQ:FTAI) at the end of the first quarter, which was 54 in the previous quarter. While we acknowledge the potential of FTAI Aviation Ltd. (NASDAQ:FTAI) 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 FTAI Aviation Ltd. (NASDAQ:FTAI) and shared Tourlite Capital Management's views on the company. 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 FTAI 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.