Janus Henderson Investors, an investment management company, released its “Forty Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. shares increased following positive news about corporate earnings. Economic growth has remained relatively stable despite challenges such as a government shutdown, policy headwinds, and slower-than-expected employment growth. Excitement around artificial intelligence (AI) drove strong returns early in the quarter. However, concerns about valuations in late October led to declines in AI stocks. The Fund returned 0.27% In the fourth quarter, compared to the Russell 1000® Growth Index, which returned 1.12%. Stock selection in the healthcare and consumer staples sectors contributed to the performance, while the information technology and consumer discretionary sectors detracted. The Fund is optimistic about the market environment in 2026, supported by ongoing steady economic growth. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Janus Henderson Forty Fund highlighted stocks like Eaton Corporation plc (NYSE:ETN). Eaton Corporation plc (NYSE:ETN) is a power management company that offers energy-efficient power management solutions for data centers and other industries. On March 26, 2026, Oracle Corporation Eaton Corporation plc (NYSE:ETN) closed at $356.80 per share. One-month return of Eaton Corporation plc (NYSE:ETN) was -5.01%, and its shares gained 30.25% over the past 52 weeks. Eaton Corporation plc (NYSE:ETN) has a market capitalization of $138.698 billion.

Janus Henderson Forty Fund stated the following regarding Eaton Corporation plc (NYSE:ETN) in its fourth quarter 2025 investor letter:

"We also are constructive on opportunities for power companies that are capitalizing on the rapid expansion of data center capacity to support AI. These include Eaton Corporation plc (NYSE:ETN), another relative detractor for the quarter. Eaton provides energy-efficient power management solutions for data centers and other industries. After strong performance earlier in the year, the stock declined in the fourth quarter as strong future orders growth was offset by production bottlenecks that resulted in slower-than-expected revenue growth. Investors also worried about the impact of near-term capital spending on margins. We see these as short-term issues, and we continue to believe in Eaton’s multi-year market opportunity powering data centers."

Eaton Corporation plc (NYSE:ETN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 87 hedge fund portfolios held Eaton Corporation plc (NYSE:ETN) at the end of the fourth quarter, up from 72 in the previous quarter. 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.

In another article, we covered Eaton Corporation plc (NYSE:ETN) and shared s list of high growth dividend paying stocks to invest in. 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.