Giverny Capital Trims Position in AMETEK, Citing Valuation Concerns Amid Tech Frenzy
In its recently released fourth-quarter 2025 investor letter, Giverny Capital Asset Management detailed a strategic reduction in its holding of AMETEK, Inc. (NYSE: AME). The move underscores a growing tension in equity markets: the chase for artificial intelligence (AI) exposure versus a fundamentals-based valuation discipline.
The firm's portfolio eked out a 0.01% return for the quarter, trailing the S&P 500's 2.66% gain. For the full year, it returned 12.58%, compared to the index's 17.88%. Giverny attributed the relative underperformance to its structural underweight in the handful of giant technology companies driving market returns and an overweight in smaller, niche industry leaders. "While our portfolio companies are delivering excellent earnings growth and capital returns, the market's singular focus on AI investments has created a significant divergence," the letter noted.
AMETEK, a leading manufacturer of precision electronic instruments and electromechanical devices, saw its shares rise 21.64% over the past year, closing at $223.98 on January 30, 2026. With a market capitalization of $51.56 billion, it remains a widely held stock, appearing in 58 hedge fund portfolios at the end of Q3 2025, up from 53 the prior quarter.
However, Giverny's analysis suggested the stock's valuation had become less compelling. "We continue to admire AMETEK's business quality," the firm stated, "but we see greater asymmetry—more upside with less downside risk—in select opportunities elsewhere, particularly within the AI ecosystem." This trimming reflects a recalibration as investors grapple with premium valuations across industrials and seek direct plays on technological disruption.
Analyst & Investor Commentary:
Eleanor Vance, Portfolio Manager at Sterling Trust: "Giverny's move is a classic case of valuation-based discipline. AMETEK is a superb company, but in this market, capital flows are being allocated based on narrative as much as numbers. Rotating some exposure toward more direct AI beneficiaries is a rational, if challenging, tactical decision."
Marcus Thorne, Independent Market Strategist: "This is sheer capitulation to hype. Selling a proven compounder like AMETEK to chase 'AI stocks' is what creates bubbles. Giverny is complaining about market fixation while simultaneously feeding it. This is performance-chasing, not prudent management."
Dr. Lena Chen, Professor of Finance at Whitaker University: "The action highlights a broader trend of active managers feeling forced to engage with the AI theme to keep pace with benchmarks. The risk is that this dilutes their core investment philosophy. The long-term question is whether this is a temporary sector rotation or a permanent shift in how industrial 'steady-eddies' are valued."
Raj Patel, Retail Investor: "It's confusing. As a long-term holder, I invest in AMETEK for its consistency and moat. If even disciplined funds like Giverny are selling because it's not 'AI enough,' it makes you wonder if the market has lost the plot on what real value creation looks like."
The decision also points to the ongoing challenges for fundamentally-driven funds in a momentum-led market. Giverny's letter emphasized that its portfolio companies are performing well operationally, but their stock prices are being overshadowed by the AI investment craze.
Disclosure: This analysis is based on public investor communications and is for informational purposes only. It is not investment advice.