Does Alpha Teknova (TKNO) Have Meaningful Growth Opportunities?

Prosper Stars & Stripes, a long/short equity fund, recently released its second quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund underperformed and generated a net return of +9.6% compared to a total return of +8.5% for the long-only small-cap Russell 2000 Index (the “Russell”), and a total return of +5.0% for the long/short equity hedge fund peer group represented by the HFRX Equity Hedge Index (the “HFRX”). For the six months ended 2025, Prosper Stars & Stripes returned a net return of (0.8%) compared to (1.8%) for the Russell and +5.9% for the HFRI. The portfolio demonstrated strong outperformance relative to its net exposure during the quarter. In the second quarter of 2025, US equities reversed the declines seen in the first quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Prosper Stars & Stripes highlighted stocks such as Alpha Teknova, Inc. (NASDAQ:TKNO). Alpha Teknova, Inc. (NASDAQ:TKNO) produces critical reagents for the life science market for the research, discovery, development, and commercialization of novel therapies, vaccines, and molecular diagnostics. The one-month return of Alpha Teknova, Inc. (NASDAQ:TKNO) was 1.89%, and its shares lost 12.55% of their value over the last 52 weeks. On August 29, 2025, Alpha Teknova, Inc. (NASDAQ:TKNO) stock closed at $4.32 per share, with a market capitalization of $231.186 million.

Prosper Stars & Stripes stated the following regarding Alpha Teknova, Inc. (NASDAQ:TKNO) in its second quarter 2025 investor letter:

"We initiated a long position in Alpha Teknova, Inc. (NASDAQ:TKNO). Over the past several years, the company has made significant investments to strengthen its ability to serve a broader range of drug development customers and to support these clients as they transition into the commercial stage, where demand for higher volumes becomes critical. We believe these initiatives position TKNO to capture meaningful growth opportunities. Based on our analysis, the shares have the potential to re-rate toward peer valuation levels of approximately 8-10x sales, which would imply a nearly doubling of the current price. "

Alpha Teknova, Inc. (NASDAQ:TKNO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Alpha Teknova, Inc. (NASDAQ:TKNO) at the end of the second quarter, which was 15 in the previous quarter. Alpha Teknova, Inc.’s (NASDAQ:TKNO) total revenue for Q2 2025 reached $10.3 million, up 7% from $9.6 million in Q2 2024. While we acknowledge the potential of Alpha Teknova, Inc. (NASDAQ:TKNO) 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 Alpha Teknova, Inc. (NASDAQ:TKNO) and shared Conestoga Capital Advisors' views on the company in the previous quarter. 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.