Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” fourth-quarter 2025 investor letter. A copy of the same can be downloaded here. U.S. equity markets experienced a quarter supported by optimism around potential monetary easing and caution related to economic growth and valuations. Early gains were driven by strong AI-related earnings and the US Federal Reserve’s rate cut in October, which improved expectations for financial conditions. However, market sentiment cooled later in the quarter. Despite this moderation, the quarter contributed positively to robust annual results. Value stocks outperformed growth, returning 3.3% versus 1.2% for the quarter. Against this backdrop, the Fund delivered a return of 2.18% (net) in the quarter, underperforming the Russell 2500 Index’s 2.22% return and the secondary benchmark, the Russell 2500 Value Index’ 3.15% return. As the market heads into 2026, the firm is closely watching factors that may affect market returns, including monetary policy changes with a new Fed Chair and the sustainability of AI investments due to high valuations among hyperscalers. In the unpredictable backdrop, the firm concentrates on its systematic and consistent investment approach, which aims to pinpoint opportunities in companies that can achieve strong performance regardless of macroeconomic factors. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Meridian Contrarian Fund highlighted American Superconductor Corporation (NASDAQ:AMSC) as one of its leading relative detractors. American Superconductor Corporation (NASDAQ:AMSC) is a leading megawatt-scale power resiliency solutions company. American Superconductor Corporation (NASDAQ:AMSC) shares traded between $13.98 and $70.49 over the past 52 weeks. On January 28, 2026, American Superconductor Corporation (NASDAQ:AMSC) stock closed at $31.82 per share. One-month return of American Superconductor Corporation (NASDAQ:AMSC) was 10.56%. American Superconductor Corporation (NASDAQ:AMSC) has a market capitalization of about $1.44 billion.
Meridian Contrarian Fund stated the following regarding American Superconductor Corporation (NASDAQ:AMSC) in its fourth quarter 2025 investor letter:
“American Superconductor Corporation (NASDAQ:AMSC) designs and manufactures power electronics and control systems for electricity transmission, distribution, and infrastructure. End markets include electric grids, wind power, industrial, and naval. Our screening process identified the company several years ago when its largest customer at the time, a Chinese wind turbine manufacturer, stole its IP, resulting in a 75% revenue decline. Our investment thesis was that the rebuilt company, following an IP litigation victory, was in a good position to resume earnings growth with significant upside potential driven by demand for electric grid upgrades, expanding wind power, and naval program wins. While the investment has been highly profitable for the strategy overall, the stock underperformed during the quarter as growth slowed against difficult year-over-year comparisons. Having reduced the position earlier in the year, we maintained our holding during the period as we continue to see long-term growth potential from rising power demand and infrastructure investment.”
American Superconductor Corporation (NASDAQ:AMSC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 26 hedge fund portfolios held American Superconductor Corporation (NASDAQ:AMSC) at the end of the third quarter, up from 23 in the previous quarter. While we acknowledge the risk and potential of American Superconductor Corporation (NASDAQ:AMSC) 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 American Superconductor Corporation (NASDAQ:AMSC) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered American Superconductor Corporation (NASDAQ:AMSC) and shared the list of stocks Jum Cramer discussed. In addition, please check out our hedge fund investor letters Q4 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.
