Artisan Small Cap Fund Sold Inspire Medical Systems (INSP) Amid Challenges

Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global equities continue to rally in the third quarter, the period with double-digit YTD gains. Major US indices like Russell 1000®, Russell Midcap®, and Russell 2000® reached record highs in the period. In the quarter, the fund’s Investor Class fund ARTSX returned 8.69%, Advisor Class fund APDSX posted a return of 8.75%, and Institutional Class fund APHSX returned 8.73%, compared to a return of 12.19% 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 third-quarter 2025 investor letter, Artisan Small Cap Fund highlighted stocks such as Inspire Medical Systems, Inc. (NYSE:INSP). Inspire Medical Systems, Inc. (NYSE:INSP) is a medical technology company that focuses on the development and commercialization of minimally invasive solutions for patients with obstructive sleep apnea. The one-month return of Inspire Medical Systems, Inc. (NYSE:INSP) was 2.51%, and its shares lost 51.79% of their value over the last 52 weeks. On November 17, 2025, Inspire Medical Systems, Inc. (NYSE:INSP) stock closed at $84.87 per share, with a market capitalization of $2.51 billion.

Artisan Small Cap Fund stated the following regarding Inspire Medical Systems, Inc. (NYSE:INSP) in its third quarter 2025 investor letter:

"We ended our investment campaigns in Inspire Medical Systems, Inc. (NYSE:INSP), Astera Labs and Clearwater Analytics during the quarter. Inspire Medical Systems is the US leader in hypoglossal nerve stimulation for sleep apnea, offering the only FDA-approved alternative to continuous positive airway pressure treatment. In late 2024, we reduced our position in Inspire from the CropSM to the GardenSM due to growing concerns about emerging competitive products. At the time, we believed that the newly launched Inspire V system would bring the company only to parity with some of these entrants, making flawless execution of the rollout essential. This quarter, it became clear that the company is facing significant challenges with the launch. As a result, we exited our GardenSM position."

Inspire Medical Systems, Inc. (NYSE:INSP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Inspire Medical Systems, Inc. (NYSE:INSP) at the end of the second quarter, which was 37 in the previous quarter. In Q3 2025, Inspire Medical Systems, Inc. (NYSE:INSP) reported revenue of $224.5 million, an 10% increase from Q3 2024. While we acknowledge the potential of Inspire Medical Systems, Inc. (NYSE:INSP) 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 Inspire Medical Systems, Inc. (NYSE:INSP) and shared Baron Discovery Fund's views on the company. 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.