TCW funds, an investment management company, released its “TCW Concentrated Large Cap Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their rally in the third quarter, driven by continued optimism around AI investments and positive corporate earnings. Against this backdrop, the fund (I share) returned +4.11% in the quarter compared to +10.51% for the Russell 1000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, TCW Concentrated Large Cap Growth Fund highlighted stocks such as Eaton Corporation plc (NYSE:ETN). Eaton Corporation plc (NYSE:ETN) is a global power management company. The one-month return of Eaton Corporation plc (NYSE:ETN) was -5.27%, and its shares gained 5.23% of their value over the last 52 weeks. On December 24, 2025, Eaton Corporation plc (NYSE:ETN) stock closed at $323.67 per share, with a market capitalization of $126.005 billion.
TCW Concentrated Large Cap Growth Fund stated the following regarding Eaton Corporation plc (NYSE:ETN) in its third quarter 2025 investor letter:
“Eaton Corporation plc (NYSE:ETN) (ETN; Industrials; 1.85%**) – Eaton Corporation plc is an intelligent power management company that makes products for the data center, utility, industrial, commercial, machine building, residential, aerospace and mobility markets. The company has evolved from a highly cyclical, lower-growth industrial conglomerate to a higher growth, higher margin, less cyclical company focused on electrical and aerospace end markets, which largely operate as oligopolies. The company is levered to multiple secular tailwinds, including electronification, AI Datacenter buildouts, and reshoring. A large backlog of multi-year megaprojects announcements and long lead times provide multi-year visibility, and we believe the current share price does not adequately reflect the longer-term cash flow generation potential of the business.”
Eaton Corporation plc (NYSE:ETN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 72 hedge fund portfolios held Eaton Corporation plc (NYSE:ETN) at the end of the third quarter, compared to 74 in the previous quarter. Eaton Corporation plc (NYSE:ETN) reported quarterly earnings of $7 billion for Q3 2025 and increased its margins by 70 basis points to reach 25%. While we acknowledge the potential of Eaton Corporation plc (NYSE:ETN) 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.