Alphyn Capital Management, an investment management firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Master Account of the fund returned 3.0% net in the third quarter compared to 8.1% for the S&P 500 Index. As of the third quarter of 2025, the top ten holdings accounted for approximately 68% of the portfolio, and approximately 17% of the portfolio was held in cash. The market narrative was dominated by AI advancements, credit cycles, and geopolitical uncertainty in the quarter. The firm focuses on compound value through disciplined reinvestment and operational excellence. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Alphyn Capital Management highlighted stocks such as Cogent Communications Holdings, Inc. (NASDAQ:CCOI). Cogent Communications Holdings, Inc. (NASDAQ:CCOI) provides high-speed Internet access, private network, and data center colocation space services. The one-month return of Cogent Communications Holdings, Inc. (NASDAQ:CCOI) was 15.10%, and its shares lost 45.99% of their value over the last 52 weeks. On October 27, 2025, Cogent Communications Holdings, Inc. (NASDAQ:CCOI) stock closed at $44.14 per share, with a market capitalization of $2.171 billion.
Alphyn Capital Management stated the following regarding Cogent Communications Holdings, Inc. (NASDAQ:CCOI) in its third quarter 2025 investor letter:
“The investment thesis for Cogent Communications Holdings, Inc. (NASDAQ:CCOI) still hinges on substantial revenue growth from wavelength services. The company is targeting approximately 500 installations per month, with an average monthly revenue per wave of $2,000, implying a potential revenue run rate of roughly $144 million (500 installations x 12 months x $24k/year) at a very high contribution margin of over 90%.
While we are seeing positive signs, wavelength revenue grew 27% sequentially (and 147% year-over-year) to a $36 million run-rate, the headline pace of reported installations, at 147, was still far below the targeted 500/month run rate needed to validate the thesis. But a closer look at the numbers reveals that Cogent also installed and billed for approximately 330 additional wave connections, which were not yet reflected in the reported revenue. The sum of these two figures, approximately 477, gets very close to the target. CEO David Schaeffer attributes the recent miss not to a lack of demand, highlighting a strong funnel and zero pre-install cancellations, but to a lag in customer acceptance. He argues that customers, conditioned by competitors’ multi-month delays, are “caught off guard” by Cogent’s ability to deliver within 30 days (vs. months for competitors). This creates a temporary gap between installation and revenue recognition as Cogent builds credibility in this new market and convinces customers to change long-held procurement habits.
The market has clearly not reacted well to this short-term execution risk. This was combined with the average performance of the rest of the business (strong performance of the IPv4 business, but weaker headline numbers for other divisions due to the final stages of “grooming” low-margin connections from the Sprint acquisition). The next quarter will be important as Cogent must now show actual evidence of execution.”
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 30 hedge fund portfolios held Cogent Communications Holdings, Inc. (NASDAQ:CCOI) at the end of the second quarter, same as 30 in the previous quarter. While we acknowledge the risk and potential of Cogent Communications Holdings, Inc. (NASDAQ:CCOI) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Cogent Communications Holdings, Inc. (NASDAQ:CCOI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Cogent Communications Holdings, Inc. (NASDAQ:CCOI) and shared the list of Recurve Capital’s views on the company in the previous quarter. 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.
