Do You Believe in the Growth Prospects of Soleno Therapeutics (SLNO)?

 TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the fund returned 2.26% (gross) and 2.01% (net), compared to the Russell 2000 Growth Index’s 12.19% return. During the quarter, all asset classes except fixed income outside the U.S. posted positive returns. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks such as Soleno Therapeutics, Inc. (NASDAQ:SLNO). Soleno Therapeutics, Inc. (NASDAQ:SLNO) is a clinical-stage biopharmaceutical company. The one-month return of Soleno Therapeutics, Inc. (NASDAQ:SLNO) was -9.58%, and its shares lost 2.16% of their value over the last 52 weeks. On January 5, 2026, Soleno Therapeutics, Inc. (NASDAQ:SLNO) stock closed at $45.22 per share, with a market capitalization of $2.429 billion.

TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Soleno Therapeutics, Inc. (NASDAQ:SLNO) in its third quarter 2025 investor letter:

"We felt differently about biopharma developer Soleno Therapeutics, Inc. (NASDAQ:SLNO) and added to our holdings as its shares pulled back by -19%. A short seller’s report questioned the safety of Soleno’s Vykat treatment for Prader-Willi Syndrome, a generic disorder leading to unnaturally intense and unsatiable hunger. We spoke with the company’s management as well as academic clinicians and believe the bear case allegations are inaccurate or hyperbolic.

Soleno Therapeutics, Inc. (NASDAQ:SLNO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 58 hedge fund portfolios held Soleno Therapeutics, Inc. (NASDAQ:SLNO) at the end of the third quarter, up from 52 in the previous quarter. In Q3 2025, Soleno Therapeutics, Inc.'s (NASDAQ:SLNO) net revenue more than doubled to $66 million from Q2 2025. While we acknowledge the potential of Soleno Therapeutics, Inc. (NASDAQ:SLNO) 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 Soleno Therapeutics, Inc. (NASDAQ:SLNO) and shared the list of cheap healthcare stocks to buy heading into 2026. 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.