Cytek Biosciences (CTKB) Faced Challenges from NIH Funding Reductions

Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The Small Company Fund fared worse compared to its benchmark in the first quarter and declined 16.03% vs 11.12% decline for the Russell 2000® Growth index. The underperformance in the quarter was led by negative investor sentiment due to geopolitical shocks or the sudden deterioration of the macroeconomic outlook. In addition, check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, The Brown Capital Management Small Company Fund highlighted stocks such as Cytek Biosciences, Inc. (NASDAQ:CTKB). Based in Fremont, California, Cytek Biosciences, Inc. (NASDAQ:CTKB) is a life sciences technology company that provides cell analysis tools. The one-month return of Cytek Biosciences, Inc. (NASDAQ:CTKB) was 19.46%, and its shares lost 44.03% of their value over the last 52 weeks.  On June 9, 2025, Cytek Biosciences, Inc. (NASDAQ:CTKB) stock closed at $3.56 per share, with a market capitalization of $450.906 million.

The Brown Capital Management Small Company Fund stated the following regarding Cytek Biosciences, Inc. (NASDAQ:CTKB) in its Q1 2025 investor letter:

“Speaking of the Trump administration’s aggressive downsizing of the U.S. government, President Trump has proposed and enacted cuts to myriad parts of the government, including the Department of Education, Department of Energy, Department of Transportation and the Environmental Protection Agency, to name a few. For companies in the Small Company portfolio, perhaps the most direct effect is from the budget cuts to the National Institutes of Health (NIH). The barrage of cuts to medical research grants at universities from the federal government has already affected the life sciences industry in significant ways. For example, Cytek Biosciences, Inc. (NASDAQ:CTKB), which develops products for cell analysis in biomedical research, reported headwinds from NIH funding reductions, new export controls for flow cytometry products to certain countries (notably China), threats of tariffs on imports and softer market conditions in the U.S.”

Cytek Biosciences, Inc. (NASDAQ:CTKB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Cytek Biosciences, Inc. (NASDAQ:CTKB) at the end of the first quarter, which was 19 in the previous quarter. In the first quarter of Cytek Biosciences, Inc. (NASDAQ:CTKB) reported $41.5 million in revenue, down 7.6% compared to Q1 2024. While we acknowledge the potential of Cytek Biosciences, Inc. (NASDAQ:CTKB) 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 Cytek Biosciences, Inc. (NASDAQ:CTKB) and shared the list of cash-rich penny stocks to buy according to hedge funds. 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.