Here's What Led Artisan Mid Cap Fund to Exit Atlassian Corporation (TEAM)

Artisan Partners, an investment management company, released its “Artisan Mid Cap Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global equity markets continued their strength in the third quarter, ending the period with double-digit year-to-date gains. In the quarter, the fund’s Investor Class fund ARTMX returned 8.80%, Advisor Class fund APDMX posted a return of 8.80%, and Institutional Class fund APHMX returned 8.83%, compared to a 2.78% return for the Russell Midcap Growth Index. The significant outperformance was led by holdings in the health care sector. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Artisan Mid Cap Fund highlighted stocks such as Atlassian Corporation (NASDAQ:TEAM). Atlassian Corporation (NASDAQ:TEAM) is a company that designs, develops, licenses, and maintains various software products. The one-month return of Atlassian Corporation (NASDAQ:TEAM) was -9.22%, and its shares gained 17.42% of their value over the last 52 weeks. On October 14, 2025, Atlassian Corporation (NASDAQ:TEAM) stock closed at $156.37 per share, with a market capitalization of $41.021 billion.

Artisan Mid Cap Fund stated the following regarding Atlassian Corporation (NASDAQ:TEAM) in its third quarter 2025 investor letter:

"Atlassian Corporation (NASDAQ:TEAM) is a leading provider of team collaboration software. We believe the company’s recent results reinforce the rationale behind our decision to exit the position. While cloud revenue growth remains healthy at 26% year-over-year, the deceleration from prior quarters suggests limited near-term acceleration in cloud migration. Ongoing concerns about Atlassian’s seat-based pricing model, alongside broader uncertainty about the impact of AI on knowledge-based jobs, continue to weigh on sentiment. In our view, Atlassian must evolve from its traditional SaaS model toward a more usage-based or value based monetization approach. However, this strategic shift lacks strong valuation support unless executed rapidly and effectively. Our evolving perspective on SaaS fundamentals over the past six months, combined with the belief that meaningful upside is unlikely until its AI investments begin delivering substantial revenue, ultimately led us to fully exit the position."

Atlassian Corporation (NASDAQ:TEAM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 64 hedge fund portfolios held Atlassian Corporation (NASDAQ:TEAM) at the end of the second quarter, compared to 82 in the previous quarter.  While we acknowledge the potential of Atlassian Corporation (NASDAQ:TEAM) 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 Atlassian Corporation (NASDAQ:TEAM) and shared Billionaire Jacob Rothschild’s RIT Capital Partners stocks with huge upside potential. Atlassian Corporation NASDAQ:TEAM) negatively contributed to Artisan Mid Cap Fund's performance in the previous quarter. In addition, please check out our hedge fund investor letters Q3 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.