Here's What Weighed on Clearwater Analytics Holdings (CWAN) Stock

Loomis Sayles, an investment management company, released its “Small/Mid Cap Growth Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The quarter started with an extreme level of policy uncertainty but concluded with an all-time high for the S&P 500. In this environment, the fund lagged the Russell 2500 Growth Index benchmark in the quarter, returning 8.49% vs. 11.31% for the index. Security selection within the consumer discretionary and financials sectors led the underperformance of the fund in the 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, Loomis Sayles Small/Mid Cap Growth 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 -0.36%, and its shares lost 19.99% of their value over the last 52 weeks. On September 12, 2025, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) stock closed at $19.61 per share, with a market capitalization of $6.386 billion.

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

"Clearwater Analytics Holdings, Inc. (NYSE:CWAN), Champion Homes and Flowco Holdings were the largest individual detractors from performance. Clearwater Analytics Holdings provides cloud native software in investment lifecycle management for the insurance and asset management industry. Earlier this year, the company made three acquisitions and is currently in the midst of integrating these acquisitions. The uncertainty around interest rates post-election also weighed on the stock."

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 TimesSquare Capital U.S. Focus Growth Strategy's views on the company. 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.