GeneDx Holdings Corp. (WGS) Surged Following Strong Earnings and Improved Guidance

Polen Capital, an investment management company, released its fourth-quarter investor letter for “Polen 5Perspectives Small Growth Strategy”. A copy of the letter can be downloaded here. The Polen 5Perspectives Small Growth Composite Portfolio returned -1.3% gross and -1.5% net of fees in the fourth quarter of 2025, compared to a 1.2% return of the Russell 2000 Growth Index. Following double-digit returns in 2Q and 3Q, small caps concluded the year with a 1.2% return in 4Q. Biotech stood out as a major performer during the quarter, expanding beyond the AI theme. The small-cap asset class has gained attention due to declining interest rates and improving earnings growth, but the firm is most excited about its structural tailwinds, including the rapid pace of innovation and the opportunity it presents for disciplined investors. Over the fourth quarter, the Strategy nearly doubled its Biotech exposure due to opportunities presented by rising interest rates, M&A, and AI tailwinds. The name of the Strategy changed from Polen U.S. Small Cap Growth to Polen 5Perspectives Small Growth, to emphasize the significance of the 5 viewpoints framework and the influence of perspective in investing. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Polen 5Perspectives Small Growth Strategy highlighted stocks like GeneDx Holdings Corp. (NASDAQ:WGS). GeneDx Holdings Corp. (NASDAQ:WGS) is a genomics company that provides genetic testing services. On February 23, 2026, GeneDx Holdings Corp. (NASDAQ:WGS) stock closed at $87.08 per share. One-month return of GeneDx Holdings Corp. (NASDAQ:WGS) was -16.97%, and its shares lost 8.34% over the past 52 weeks. GeneDx Holdings Corp. (NASDAQ:WGS) has a market capitalization of $2.52 billion.

Polen 5Perspectives Small Growth Strategy stated the following regarding GeneDx Holdings Corp. (NASDAQ:WGS) in its fourth quarter 2025 investor letter:

"GeneDx Holdings Corp. (NASDAQ:WGS) is a genetic testing company that uses advanced whole exome and genome sequencing to diagnose rare genetic disorders faster, helping doctors create personalized treatment plans and improve health outcomes. The company delivered better-than expected results—including raised full-year guidance—which was a function of a significant year-over-year increase in high value exome and genome testing volumes and meaningful improvements in insurance reimbursement rates."

GeneDx Holdings Corp. (NASDAQ:WGS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 39 hedge fund portfolios held GeneDx Holdings Corp. (NASDAQ:WGS) at the end of the fourth quarter, up from 34 in the previous quarter. While we acknowledge the potential of GeneDx Holdings Corp. (NASDAQ:WGS) 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 GeneDx Holdings Corp. (NASDAQ:WGS) and shared a list of high-risk high-reward growth stocks to invest in. In addition, please check out our hedge fund investor letters Q4 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.