Atai Capital Management, an investment management firm, recently released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned 32.8% in the second quarter, net of all fees, bringing the YTD returns to 29.4% net of all fees. This is compared to a 10.9% total return for the S&P 500, an 8.5% total return for the Russell 2000, and a 15.5% total return for the Russell Microcap for the quarter and 6.2%, -1.8% and -1.1%, respectively, for YTD. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its second-quarter 2025 investor letter, Atai Capital Management highlighted stocks such as AstroNova, Inc. (NASDAQ:ALOT). AstroNova, Inc. (NASDAQ:ALOT) develops and manufactures specialty printers and data acquisition and analysis systems. The one-month return of AstroNova, Inc. (NASDAQ:ALOT) was -0.27%, and its shares lost 22.17% of their value over the last 52 weeks. On August 15, 2025, AstroNova, Inc. (NASDAQ:ALOT) stock closed at $11.27 per share with a market capitalization of $85.61 million.
Atai Capital Management stated the following regarding AstroNova, Inc. (NASDAQ:ALOT) in its second quarter 2025 investor letter:
“We first detailed our thesis on AstroNova, Inc. (NASDAQ:ALOT) in our Q1-2023 letter and have provided numerous updates in subsequent letters. In short, our investment was predicated on the view that AstroNova was a low-risk “under-earner” with an obvious path for earnings to normalize significantly higher.
So, what went wrong? To begin, the core of our original thesis proved correct: AstroNova’s legacy business did experience a significant earnings inflection despite weak performance from its product identification segment. As detailed in prior letters, this recovery, while slower than we had hoped, should have been sufficient to generate attractive returns. However, despite the thesis being mostly on track, the situation would change dramatically with the acquisition of MTEX.
In May of 2024, AstroNova would acquire MTEX for approximately $26 million, an amount equal to 20% of its market cap at the time, and the company was expected to contribute roughly $3 million in EBITDA that year. Instead, if we fast forward to today, MTEX is on track to lose approximately $4 million in EBITDA annually – and before you ask, no, sadly, that is not a typo. To be blunt, this acquisition was a catastrophic mistake. Making matters worse, information recently brought to light by an activist investor has deepened our skepticism of the “technology” acquired, as well as the company’s decision (until recently) to continue investing in what appears to be a low-quality, cash-burning business with little high-margin recurring revenue…” (Click here to read the full text)
A technician editing complex data acquisition systems in an analytical workspace.
AstroNova, Inc. (NASDAQ:ALOT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 3 hedge fund portfolios held AstroNova, Inc. (NASDAQ:ALOT) at the end of the first quarter, which was 3 in the previous quarter. In the fiscal first quarter of 2026, AstroNova, Inc.’s (NASDAQ:ALOT) reported revenue of $37.7 million, grew 14.4% year over year and 0.9% sequentially.While we acknowledge the risk and potential of AstroNova, Inc. (NASDAQ:ALOT) 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 AstroNova, Inc. (NASDAQ:ALOT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered AstroNova, Inc. (NASDAQ:ALOT) and shared Atai Capital Management’s views on the company in the previous quarter. 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.
