Weakness in the IP Segment Weighed on Synopsys’ (SNPS) Performance

Group 1: Market Overview - U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index rising 2.66% and the Bloomberg U.S. Aggregate Bond Index increasing by 1.10% [1] - The Russell 1000 Growth Index saw healthcare, communication services, and financials as the top-performing sectors, while utilities, real estate, and materials lagged [1] - Consumer confidence deteriorated toward year-end, raising concerns about future spending and the labor market [1] Group 2: Fund Performance - The Aristotle Growth Equity Fund (Class I-2) returned 0.95%, underperforming the Russell 1000 Growth Index's 1.12% [1] - Poor security selection in the information technology and consumer discretionary sectors detracted from performance, while positive contributions from healthcare and industrials improved relative performance [1] Group 3: Company Focus - Synopsys, Inc. - Synopsys, Inc. (NASDAQ:SNPS) offers electronic design automation software products and had a market capitalization of $85.934 billion [2] - The stock closed at $449.17 per share on February 25, 2026, with a one-month return of -6.42% and a 52-week loss of 1.22% [2] - In 2025, Synopsys, Inc. generated total revenue of $7.05 billion, up approximately 15% from the previous year [4] Group 4: Investment Decisions - The fund sold Synopsys, Inc. following disappointing quarterly earnings and a lower revenue outlook due to weakness in the internet protocol segment [3] - The company is not on the list of 30 Most Popular Stocks Among Hedge Funds, with 91 hedge fund portfolios holding it at the end of Q4, up from 83 in the previous quarter [4] - The fund believes certain AI stocks offer greater upside potential and carry less downside risk compared to Synopsys, Inc. [4]