Here’s Why Artisan Small Cap Fund Trimmed Guidewire Software (GWRE)

Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Global markets saw an incredible but volatile second quarter, shifting from deep declines to strong gains. In the quarter, its Investor Class fund ARTSX returned 7.30%, Advisor Class fund APDSX posted a return of 7.33%, and Institutional Class fund APHSX returned 7.36%, compared to a return of 11.97% for the Russell 2000 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its second-quarter 2025 investor letter, Artisan Small Cap 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 -5.82%, and its shares gained 45.15% of their value over the last 52 weeks. On August 22, 2025, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $213.99 per share, with a market capitalization of $18.017 billion.

Artisan Small Cap Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its second quarter 2025 investor letter:

“Along with Halozyme and Clearwater Analytics, we also trimmed Guidewire Software, Inc. (NYSE:GWRE) during the quarter. Guidewire is a market leader in next generation property and casualty (P&C) insurance software. A few years ago, Guidewire transitioned from a licensed software business model to a subscription-based cloud service. Historically, as companies emerge from (often messy) transitions, their profit growth tends to accelerate. We believe Guidewire is at this inflection point. The company has consistently performed in line with our thesis, driving a durable and compelling profit cycle. While we remain optimistic about Guidewire’s growth prospects, we have been reducing our position due to the company’s increasing market capitalization, which is approaching the upper limits of our small-cap mandate.”

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

An insurance adjuster reviewing images and paperwork to process a claim.

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 Baron Asset Fund’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.