Clearwater Analytics Holdings (CWAN) Slid in Q2 Despite Strong Results

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the fund returned 11.28% (gross) and 11.02% (net), compared to the Russell 2000 Growth Index by 11.97%. Equities posted double-digit returns in the second quarter as global economic activity measures lifted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, TimesSquare Capital Small Cap Growth Strategy highlighted stocks such as Clearwater Analytics Holdings, Inc. (NYSE:CWAN). Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is a technology company that develops and provides a Software-as-a-Service (SaaS) for investment analytics and reporting solutions. The one-month return of Clearwater Analytics Holdings, Inc. (NYSE:CWAN) was 3.43%, and its shares lost 17.12% of their value over the last 52 weeks. On September 11, 2025, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) stock closed at $19.90 per share, with a market capitalization of $6.48 billion.

TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding Clearwater Analytics Holdings, Inc. (NYSE:CWAN) in its second quarter 2025 investor letter:

“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that are growing their shares of corporate IT budgets. Clearwater Analytics Holdings, Inc. (NYSE:CWAN) provides software-as-a-service solutions for automated investment data aggregation, reconciliation, accounting, and reporting. The company delivered strong results, including revenue growth. They recently acquired Enfusion, Beacon, and Bistro assets that serve to broaden the product offering. The integration of these assets is the company’s focus in support of their vision of a front-to-back asset management platform. In the near term, there will be a dilutive impact on Clearwater’s financial profile and that caused its shares to drop by -18%.”

Is Clearwater Analytics Holdings Inc. (CWAN) the Best Low Beta Tech Stock to Buy According to Analysts?

Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held Clearwater Analytics Holdings, Inc. (NYSE:CWAN) at the end of the second quarter, which was 41 in the previous quarter. In the second quarter of 2025, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) reported revenue of $181.9 million, reflecting an increase of 70% year-over-year. While we acknowledge the risk and potential Clearwater Analytics Holdings, Inc. (NYSE:CWAN) 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 Clearwater Analytics Holdings, Inc. (NYSE:CWAN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Clearwater Analytics Holdings, Inc. (NYSE:CWAN) and shared the list of tech stocks with highest upside potential. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

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