Here's What Drove SoundThinking (SSTI) Stock Higher

Conestoga Capital Advisors, an asset management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets started the year with a rally due to optimism about a strong economy and expectations of moderating inflation and lower interest rates. However, concerns over slowing earnings from major Technology companies, geopolitical tensions, and an upcoming announcement on tariffs led to a sharp decline in equities by the end of the first quarter. Investors sought safety, driving U.S. Treasury yields down. The Conestoga Small Cap Composite returned -11.35% (net) in the first quarter compared to the Russell 2000 Growth Index’s -11.12% return. The Conestoga SMid Cap Composite returned -5.73% compared to the Russell 2500 Growth Index’s -10.80% return. The Conestoga Micro-Cap Composite returned -8.24% vs the Russell Microcap Growth Index’s return of -17.75%. Finally, the Conestoga Mid Cap Composite returned 0.96% (net), compared to the Russell Midcap Growth Index’s -7.12% return. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its first-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as SoundThinking, Inc. (NASDAQ:SSTI). SoundThinking, Inc. (NASDAQ:SSTI) is a public safety technology company. The one-month return of SoundThinking, Inc. (NASDAQ:SSTI) was -3.92%, and its shares gained 19.39% of their value over the last 52 weeks. On April 29, 2025, SoundThinking, Inc. (NASDAQ:SSTI) stock closed at $15.95 per share with a market capitalization of $202.024 million.

Conestoga Capital Advisors stated the following regarding SoundThinking, Inc. (NASDAQ:SSTI) in its Q1 2025 investor letter:

"SoundThinking, Inc. (NASDAQ:SSTI) develops and sells a gunfire detection system to city governments around the world for the purpose of reducing gun violence and crime. During the quarter, SSTI received news that a large NYC contract was renewed, driving the stock higher. Also, the city of Chicago put out an RFP for a gun detection system and SSTI continued to see strong interest in its product offering."

SoundThinking, Inc. (NASDAQ:SSTI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held SoundThinking, Inc. (NASDAQ:SSTI) at the end of the fourth quarter, compared to 8 in the third quarter. SoundThinking, Inc.'s (NASDAQ:SSTI) fourth quarter revenue decreased by 10% year-over-year to $23.4 million. While we acknowledge the potential of SoundThinking, Inc. (NASDAQ:SSTI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In addition, please check out our hedge fund investor letters Q1 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.