Multiple Growth Drivers Lifted Sterling Infrastructure (STRL) in Q2

Loomis Sayles, an investment management company, released its “Small Cap Growth Fund” investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. The second quarter started with significant volatility but concluded at an all-time high for the S&P 500. The fund returned 9.37%, underperforming the Russell 2000 Growth Index's 11.97% return due to security selection within the information technology and financial sectors.  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 Cap Growth Fund highlighted stocks such as Sterling Infrastructure, Inc. (NASDAQ:STRL). Sterling Infrastructure, Inc. (NASDAQ:STRL) provides e-infrastructure, transportation, and building solutions in the United States. The one-month return of Sterling Infrastructure, Inc. (NASDAQ:STRL) was 22.46%, and its shares gained 135.21% of their value over the last 52 weeks. On September 29, 2025, Sterling Infrastructure, Inc. (NASDAQ:STRL) stock closed at $341.10 per share, with a market capitalization of $10.407 billion.

Loomis Sayles Small Cap Growth Fund stated the following regarding Sterling Infrastructure, Inc. (NASDAQ:STRL) in its second quarter 2025 investor letter:

"Sterling Infrastructure, Inc. (NASDAQ:STRL) is an infrastructure services business that specializes in transportation, e-infrastructure, and building solutions in the United States. The stock recovered after a sharp selloff in the first quarter on the news of DeepSeek’s AI offering. The company had a solid Q1 report, and its data center business is booming. Backlog growth inflected higher, and management spoke confidently about its visibility for the next few years."

Sterling Infrastructure, Inc. (NASDAQ:STRL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 25 hedge fund portfolios held Sterling Infrastructure, Inc. (NASDAQ:STRL) at the end of the second quarter, down from 30 in the previous quarter. While we acknowledge the potential of Sterling Infrastructure, Inc. (NASDAQ:STRL) 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 Sterling Infrastructure, Inc. (NASDAQ:STRL) and shared Alger Weatherbie Specialized Growth Fund'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.