Do You Believe in the Upside Potential of ThredUp (TDUP)?

Optimist Fund, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned +9.1% in the third quarter compared to 7.9% for the benchmark. The firm focuses on acceleration in several cyclical holdings in the portfolio that have been in multi-year downswings, while the world holds attention on the latest developments in AI. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Optimist Fund highlighted stocks such as ThredUp Inc. (NASDAQ:TDUP). ThredUp Inc. (NASDAQ:TDUP) is an online resale platform that helps consumers buy and sell primarily secondhand apparel, shoes, and accessories. The one-month return of ThredUp Inc. (NASDAQ:TDUP) was -8.59%, and its shares gained 1,458.21% of their value over the last 52 weeks. On October 30, 2025, ThredUp Inc. (NASDAQ:TDUP) stock closed at $8.62 per share, with a market capitalization of $1.062 billion.

Optimist Fund stated the following regarding ThredUp Inc. (NASDAQ:TDUP) in its third quarter 2025 investor letter:

“ThredUp Inc. (NASDAQ:TDUP) – ThredUp delivered an impressive quarter. Revenue rose 16% year over year to $77.7 million — the company’s fastest pace in several years and adjusted EBITDA increased roughly ~100% year over year, highlighting the strong operating leverage inherent in the model.

Customer metrics were equally encouraging. Active buyers grew 17% to 1.47 million, while new buyer acquisition surged 74%.

Management raised full-year guidance and now expects approximately 15% revenue growth, and an adjusted EBITDA margin of about 4%.

We continue to see significant upside from here. Despite the accelerating momentum, analysts still forecast only ~10% revenue growth over the next couple of years — well below our base case of 15–20%. Given our higher revenue assumption, which is accompanied by continued robust incremental margins, our expectation for long term profits is materially ahead of market expectations. ThredUp remains our largest investment.”

Is ThredUp Inc. (TDUP) the Best Performing NASDAQ Stock So Far in 2025?

ThredUp Inc. (NASDAQ:TDUP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 25 hedge fund portfolios held ThredUp Inc. (NASDAQ:TDUP) at the end of the second quarter, compared to 13 in the previous quarter. In the second quarter of 2025, ThredUp Inc.’s (NASDAQ:TDUP) revenue growth accelerated to 16.4% year-over-year to $77.7 million. While we acknowledge the risk and potential of ThredUp Inc. (NASDAQ:TDUP) 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 ThredUp Inc. (NASDAQ:TDUP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered ThredUp Inc. (NASDAQ:TDUP) and shared Optimist Fund’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.

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.