Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors Small Cap Strategy returned -1.89% net-of-fees, trailing the Russell 2000 Growth Index’s 1.22% return. The returns were volatile in the quarter. The “low quality” stocks rally persisted in the quarter, but at a slower pace compared to earlier quarters. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks like Clearwater Analytics Holdings, Inc. (NYSE:CWAN). Clearwater Analytics Holdings, Inc. (NYSE:CWAN) provides technology solutions for accounting and reporting and is a significant contributor to the strategy’s performance in the quarter. On February 17, 2026, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) stock closed at $22.93 per share. Clearwater Analytics Holdings, Inc. (NYSE:CWAN) delivered a -5.75% return in the past month, and its shares are down 15.20% over the past twelve months. Clearwater Analytics Holdings, Inc. (NYSE:CWAN) has a market capitalization of $6.825 billion.
Conestoga Capital Advisors stated the following regarding Clearwater Analytics Holdings, Inc. (NYSE:CWAN) in its fourth quarter 2025 investor letter:
“Clearwater Analytics Holdings, Inc. (NYSE:CWAN) provides cloud-based investment accounting and analytics software to institutional investors and insurers. Shares significantly outperformed in 4Q25 following the announcement that the company would be acquired, which drove a re-rating toward the agreed transaction value. The acquisition highlighted the strategic value of CWAN’s highly recurring revenue model, strong client retention, and critical role within institutional investment operations.”
Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 33 hedge fund portfolios held Clearwater Analytics Holdings, Inc. (NYSE:CWAN) at the end of the third quarter, compared to 51 in the previous quarter. While we acknowledge the potential of Clearwater Analytics Holdings, Inc. (NYSE:CWAN) 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.
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