Smoke-Free Product Platform Boosted Philip Morris International (PM) in Q2

Thu, Aug 21, 2025, 8:26 AM 3 min read

Artisan Partners, an investment management company, released its “Artisan Value Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets faced significant volatility in the second quarter, fueled by the announcement and subsequent pause of the "Liberation Day" tariffs. Against this backdrop, the fund’s Investor Class ARTLX, Advisor Class APDLX, and Institutional Class APHLX returned 5.99%, 5.96%, and 5.96%, respectively, in the second quarter compared to a 3.79% return for the Russell 1000® Value Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2025.

In its second-quarter 2025 investor letter, Artisan Value Fund highlighted stocks such as Philip Morris International Inc. (NYSE:PM). Philip Morris International Inc. (NYSE:PM) is a tobacco company that offers cigarettes and smoke-free products. The one-month return of Philip Morris International Inc. (NYSE:PM) was 7.31%, and its shares have appreciated by 43.92% over the past 52 weeks. On August 20, 2025, Philip Morris International Inc. (NYSE:PM) stock closed at $172.85 per share, with a market capitalization of $269.057 billion.

Artisan Value Fund stated the following regarding Philip Morris International Inc. (NYSE:PM) in its second quarter 2025 investor letter:

"In the consumer staples sector, tobacco company Philip Morris International Inc. (NYSE:PM) and discount retailer Dollar General (DG) continued their strength from Q1. Both stocks are up over 50% year to date. PM’s growth is being driven by its smoke-free product platform led by iQOS, a heat-not-burn tobacco alternative, and Zyn nicotine pouches. We believe PM still has significant runway for growth in the US—the world’s most profitable nicotine market and one that makes up less than 10%ofPM’srevenues. Looking at PM through our margin of safety criteria, the business trades for an undemanding valuation and has extraordinary business economics and a strong credit profile."

A man exhaling smoke from a cigarette indicating the use of tobacco products.

Philip Morris International Inc. (NYSE:PM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held Philip Morris International Inc. (NYSE:PM) at the end of the first quarter, which was 102 in the previous quarter. While we acknowledge the potential of Philip Morris International Inc. (NYSE:PM) 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.