Artisan Small Cap Fund Moved Back Clearwater Analytics Holdings (CWAN) into the "Garden from the Crop"

Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global markets saw an incredible but volatile quarter in the second quarter, shifting from deep declines to strong gains. In the quarter, its Investor Class fund ARTSX returned 7.30%, Advisor Class fund APDSX posted a return of 7.33%, and Institutional Class fund APHSX returned 7.36%, compared to a return of 11.97% for the Russell 2000 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its second-quarter 2025 investor letter, Artisan Small Cap Fund highlighted stocks such as Clearwater Analytics Holdings, Inc. (NYSE:CWAN). Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is a technology company that develops and provides a Software-as-a-Service (SaaS) for investment analytics and reporting solutions. The one-month return of Clearwater Analytics Holdings, Inc. (NYSE:CWAN) was -8.07%, and its shares lost 20.42% of their value over the last 52 weeks. On August 21, 2025, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) stock closed at $19.60 per share, with a market capitalization of $6.383 billion.

Artisan Small Cap Fund stated the following regarding Clearwater Analytics Holdings, Inc. (NYSE:CWAN) in its second quarter 2025 investor letter:

"Among the detractors in Q2 were Halozyme, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) and Lattice Semiconductor. Clearwater provides automated investment accounting, compliance and risk reporting for insurance companies, corporations and asset managers. Its key differentiator is a master security identifier list that consolidates data from multiple sources, driving best-in-class accuracy, integration, reporting and analytics. Clearwater’s cloud based software streamlines investment accounting, freeing clients to focus on higher value activities such as asset allocation and investment selection. We moved Clearwater back into the GardenSM from the CropSM given its decision to significantly expand the size and scope of its M&A strategy. As a public company, Clearwater has yet to demonstrate the ability to successfully acquire and integrate larger scale transactions. Therefore, we need to see evidence of success before considering a return to a CropSM capital campaign.

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Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held Clearwater Analytics Holdings, Inc. (NYSE:CWAN) at the end of the second quarter, which was 41 in the previous quarter. In the second quarter of 2025, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) reported revenue of $181.9 million, reflecting an increase of 70% year-over-year. 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.

In another article, we covered Clearwater Analytics Holdings, Inc. (NYSE:CWAN) and shared the list of oversold NYSE stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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