Guidewire Software (GWRE) Surged Following the Earnings Report

Brown Capital Management, an investment management company, released its “The Brown Capital Management Small Company Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The small-cap US stocks rebounded in the second quarter following a challenging first quarter. The Small Company Fund returned 8.59% in the second quarter, lagging the Russell 2000® Growth index’s 11.97% return. The underperformance in the quarter occurred in the last few weeks of the period. In addition, check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, The Brown Capital Management Small Company Fund highlighted stocks such as Guidewire Software, Inc. (NYSE:GWRE). Guidewire Software, Inc. (NYSE:GWRE) offers a platform for property and casualty (P&C) insurance companies. The one-month return of Guidewire Software, Inc. (NYSE:GWRE) was 17.64%, and its shares gained 46.41% of their value over the last 52 weeks. On September 12, 2025, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $252.94 per share, with a market capitalization of $21.381 billion.

The Brown Capital Management Small Company Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its second quarter 2025 investor letter:

“Among the contributors to performance in the second quarter of 2025 were Datadog (DDOG) and Guidewire Software, Inc. (NYSE:GWRE).

Guidewire Software provides packaged software running mission-critical processes at property and casualty (P&C) insurance companies. These processes include claims handling, underwriting, policy administration and customer billing. The software often replaces decades-old code running on mainframe computers, thereby reducing costs and improving decision making and agility.

Guidewire’s stock price rose during the quarter following its earnings report, as revenue and profitability metrics were better than expected. The results demonstrated continued strong demand for Guidewire’s cloud platform, with revenue growing 22% from a year earlier. This growth was driven by existing customers migrating from older on-premise deployments to Guidewire’s new cloud platform, as well as a pick-up in large new customers to the platform. As the platform gains scale, Guidewire’s profitability is improving. Subscription and support gross margins increased to 71% in the quarter from 66% a year earlier. In addition to its cloud platform, Guidewire’s new product innovations including data analytics tools and AI-enabled automation capabilities should drive growth for many years.”

Why Guidewire Software Inc (GWRE) is Skyrocketing So Far in 2025?

Guidewire Software, Inc. (NYSE:GWRE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Guidewire Software, Inc. (NYSE:GWRE) at the end of the second quarter, which was 55 in the previous quarter. While we acknowledge the risk and potential of Guidewire Software, Inc. (NYSE:GWRE) 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 Guidewire Software, Inc. (NYSE:GWRE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Guidewire Software, Inc. (NYSE:GWRE) and shared Brown Advisory Mid-Cap Growth Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 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.