Meridian Growth Fund Reduced its Position in Alight (ALIT) in Q3

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equities hit a record high in the third quarter, fueled by continued gains in technology and falling bond yields. Easing tariff rhetoric and renewed AI infrastructure investments boosted large tech stocks. In mid-September U.S. Federal Reserve lowered rates by 25 basis points. Against this backdrop, the fund returned -1.78% (net) compared to the Russell 2500 Growth Index’s 10.73% return. Sector positioning and the avoidance of names that do not meet the firm’s strict investment discipline led to 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 third-quarter 2025 investor letter, Meridian Growth Fund highlighted stocks such as Alight, Inc. (NYSE:ALIT). Alight, Inc. (NYSE:ALIT) is a leading technology-enabled services company. The one-month return of Alight, Inc. (NYSE:ALIT) was -17.45%, and its shares lost 71.66% of their value over the last 52 weeks. On November 28, 2025, Alight, Inc. (NYSE:ALIT) stock closed at $2.31 per share, with a market capitalization of $1.269 billion.

Meridian Growth Fund stated the following regarding Alight, Inc. (NYSE:ALIT) in its third quarter 2025 investor letter:

"Alight, Inc. (NYSE:ALIT) is a leading cloud-based human capital technology provider of enterprise-level software that helps businesses and their employees manage critical human resources functions. Through its investments in software and automation, Alight has built a distinct advantage that allows its customers to deliver HR services at a much lower cost while providing a better experience for employees. The stock underperformed during the quarter following disappointing sales and lowered revenue guidance. A year-long technology transformation— migrating services to the cloud, integrating AI capabilities, and coinciding with CEO and CFO changes—proved more disruptive than anticipated. Customer retention declined from ~98% to ~93%, and new sales remained soft amid execution challenges and a weaker macro environment. Cost controls have stabilized EBITDA, but revenue normalization may take years rather than quarters. Given this mixed outlook, but recognizing the stock’s compelling valuation, we reduced our position during the period."

Alight, Inc. (NYSE:ALIT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Alight, Inc. (NYSE:ALIT) at the end of the third quarter, which was 30 in the previous quarter. In Q3 2025, Alight, Inc. (NYSE:ALIT) reported revenue of $533 million compared to $555 million a year earlier. While we acknowledge the potential of Alight, Inc. (NYSE:ALIT) 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 Alight, Inc. (NYSE:ALIT) and shared the list of must-buy penny stocks to buy. 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.