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Sphere Entertainment Co. (SPHR) Slipped On Mixed Earnings Results

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Sphere Entertainment Co. (SPHR) Slipped On Mixed Earnings Results

Ariel Investments, an investment management company, released its “Ariel Fund” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. Due to investor excitement for stocks with an artificial intelligence (AI) theme, the bull market surged through the second quarter. The S&P 500 edged a small gain despite the loss in Mid- and Small-Cap stocks because of this narrow, momentum-driven rally. The fund decreased -5.64% in the quarter against this backdrop, underperforming the Russell 2500 Value Index’s -4.31% and the Russell 2500 Index’s -4.27% return. For more information on the fund’s top picks in 2024, please check its top five holdings.

Ariel Fund highlighted stocks like Sphere Entertainment Co. (NYSE:SPHR), in the second quarter 2024 investor letter. Sphere Entertainment Co. (NYSE:SPHR) engages in the entertainment business. Sphere Entertainment Co.’s (NYSE:SPHR) one-month return was -7.86%, and its shares lost 3.03% of their value over the last 52 weeks. On August 6, 2024, Sphere Entertainment Co. (NYSE:SPHR) stock closed at $39.06 per share with a market capitalization of $1.38 billion.

Ariel Fund stated the following regarding Sphere Entertainment Co. (NYSE:SPHR) in its Q2 2024 investor letter:

“By comparison, shares of live entertainment, media and technology company, Sphere Entertainment Co. (NYSE:SPHR) traded down on mixed earnings results, giving back some of its strong first quarter gains. Although residency demand is robust and the venues’ original content experience and Exosphere remain popular, some investors expect near-term utilization will slow due to Las Vegas seasonality. Meanwhile, international expansion remains the company’s priority, with management suggesting a major announcement soon. Although we believe it will take time for Sphere to reach its full potential, the company is well on its way to having events 365 days a year. It is ramping up the scale of its concert residencies, securing marquee sporting and corporate events, and creating more original content for The Sphere Experience. In our view, the new experiential immersive venue in Las Vegas and its potential franchise opportunities alongside the company’s two regional sports and entertainment networks present a long-term opportunity that remains meaningfully underappreciated at current trading levels.”

A crowd of people gathered in a theatre watching an interactive live show.

Sphere Entertainment Co. (NYSE:SPHR) is not on our list of 31 Most Popular Stocks Among Hedge Funds.  Sphere Entertainment Co. (NYSE:SPHR) generated total revenues of approximately $321 million and adjusted operating income of $61.5 million for the fiscal ’24 third quarter. While we acknowledge the potential of Sphere Entertainment Co. (NYSE:SPHR) 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 another article, we discussed Sphere Entertainment Co. (NYSE:SPHR) and shared Third Avenue Small-Cap Value Fund’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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

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