Ariel Investments, an investment management company, released its “Ariel Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2025, the majority of the main U.S. indices saw a decline. Even though Wall Street is tense and markets are still volatile, the firm is taking advantage of the turbulence by carefully purchasing the undervalued stock of quality companies whose value should be realized over the long term. Against this backdrop, Ariel Fund returned -8.00% in the quarter, lagging both the Russell 2500 Value and Russell 2000 Value indices, which returned -5.83% and -7.74%. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, Ariel Fund highlighted stocks such as Paramount Global (NASDAQ:PARA). Paramount Global (NASDAQ:PARA) is a mass media company that operates through TV Media, Direct-to-Consumer, and Filmed Entertainment segments. The one-month return of Paramount Global (NASDAQ:PARA) was -7.42%, and its shares lost 13.41% of their value over the last 52 weeks. On April 22, 2025, Paramount Global (NASDAQ:PARA) stock closed at $10.98 per share with a market capitalization of $7.83 billion.

Ariel Fund stated the following regarding Paramount Global (NASDAQ:PARA) in its Q1 2025 investor letter:

"Several stocks in the portfolio had strong returns in the quarter. Shares of entertainment company, Paramount Global (NASDAQ:PARA), rose during the period. The company entered 2025 with healthy operating momentum at Paramount+, with strong year-over-year engagement growth driven by its original programming and sports offerings. As such, Paramount+ remains on track for domestic profitability this year, with global profitability likely in 2026. Meanwhile, declining linear TV viewership and related pressure on advertising from ratings erosion remain headwinds. Although the Skydance transaction is expected to close in the near term, some investors are concerned the merger may remain in FCC purgatory. Whether the deal is approved or not, we believe the underlying value of the company’s proprietary content and media assets is not reflected in its current share price."

A closeup of a digital newsroom, highlighting the complexity of the modern media landscape.

Paramount Global (NASDAQ:PARA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. Our database shows that 54 hedge fund portfolios held Paramount Global (NASDAQ:PARA) at the end of the fourth quarter, compared to 44 in the third quarter. While we acknowledge the potential of Paramount Global (NASDAQ:PARA) 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 cheapest AI stock.

In addition, please check out our hedge fund investor letters Q1 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.