BILL Holdings (BILL) Fell due to Weakness in Consumer Confidence

Frontier Capital Management, an investment management company, released its “Frontier Small Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Class N shares of the fund returned -14.43% in the first quarter, compared to -11.12% for the benchmark Russell 2000 Growth Index. The fund returned -14.50% for the 12 months ended March 31, 2025, compared to the benchmark return of -4.86%. US equities traded lower in the first quarter, mainly during the last week of the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first quarter 2025 investor letter, Frontier Small Cap Growth Fund highlighted stocks such as BILL Holdings, Inc. (NYSE:BILL). BILL Holdings, Inc. (NYSE:BILL) provides cloud-based software solutions to simplify, digitize, and automate complex back-office financial operations. The one-month return of BILL Holdings, Inc. (NYSE:BILL) was 5.68%, and its shares lost 8.49% of their value over the last 52 weeks. On July 3, 2025, BILL Holdings, Inc. (NYSE:BILL) stock closed at $48.21 per share, with a market capitalization of $4.97 billion.

Frontier Small Cap Growth Fund stated the following regarding BILL Holdings, Inc. (NYSE:BILL) in its first quarter 2025 investor letter:

"Industrials was the second main area of underperformance, mostly due to stock selection. Our worst industrial name was BILL Holdings, Inc. (NYSE:BILL), a payments company that services small businesses. When BILL reported its fourth quarter financial results, investors became concerned about the company’s ability to maintain its margins due to lower adoption rates of its more profitable payment service offerings. Additionally, during the period, market sentiment towards small businesses turned markedly negative. We reduced our position in BILL as it appears the ongoing consumer confidence weakness will continue to hamper small businesses spending."

BILL Holdings, Inc. (NYSE:BILL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 53 hedge fund portfolios held BILL Holdings, Inc. (NYSE:BILL) at the end of the first quarter, which was 64 in the previous quarter. In the fiscal third quarter of 2025, BILL Holdings, Inc. (NYSE:BILL) reported revenue of $358 million up 11% year-over-year. While we acknowledge the potential of BILL Holdings, Inc. (NYSE:BILL) 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 undervalued AI stock set for massive gains.

In another article, we covered BILL Holdings, Inc. (NYSE:BILL) and shared Parnassus Mid Cap Growth Fund's views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of BILL 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.

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Disclosure: None. This article is originally published at Insider Monkey.