Laughing Water Capital, an investment management company, released its fourth-quarter 2025 investor letter. In the quarter, Laughing Water Capital returned ~6.8%, bringing the full-year returns to ~3.9% net of fees and expenses. In comparison, the SP500TR and R2000 returned approximately 2.7% and 2.2%, respectively, in the quarter, and finished the year up by 17.9% and 12.8%, respectively. A copy of the letter can be downloaded here. The Fund outperformed the indexes last year, but it has lagged behind them in the current year. However, what really matters is the cumulative returns over the long run, as volatility tends to smooth out over time. The Portfolio is well-positioned in this regard, delivering strong results on a cumulative basis since inception and returned about 400%, vs ~332% for the SP500TR and ~175% for our most relevant benchmark, the R2000. In addition, you can check the Strategy’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Laughing Water Capital highlighted stocks such as PAR Technology Corporation (NYSE:PAR). PAR Technology Corporation (NYSE:PAR) is a technology company that offers cloud-based hardware and software solutions to the restaurant and retail industries. On January 14, 2026, PAR Technology Corporation (NYSE:PAR) stock closed at $39.77 per share. One-month return of PAR Technology Corporation (NYSE:PAR) was 5.46%, and its shares lost 48.17% of their value over the last 52 weeks. PAR Technology Corporation (NYSE:PAR) has a market capitalization of $1.573 billion.
Laughing Water Capital stated the following regarding PAR Technology Corporation (NYSE:PAR) in its fourth quarter 2025 investor letter:
“PAR Technology Corporation (NYSE:PAR) – PAR is our restaurant software company, and was a meaningful detractor on our performance, as shares were down ~50% on the year. There was some normal fluctuation in the business due to customers’ implementation timelines that did not go our way, but PAR’s biggest problem seems to be that they are a software company in a world that believes AI and “vibe coding” will destroy legacy software. This belief caused multiples to come down dramatically across the sector. The other mortal sin committed by PAR was choosing to think long term about their business in a market that seems to only care about “hitting the numbers”. In brief, management elected to delay some expected revenue so that they could divert resources toward winning new business from a tier 1 operator.
On the former point, I think this view is shortsighted. PAR is not just software – it is years of customer relationships and ecosystem integrations that can’t be replicated through code alone. PAR’s customers have enterprise level decision making processes in place. Nobody responsible for hundreds or thousands of restaurants will switch to a vibe-coded upstart on a whim. On the latter point, while management has not fully confirmed that they have won a tier 1 operator, they have indicated that they have moved past the RFP stage and into the development phase, while commenting “we’re generally in a market where the press release comes out quite a bit after we’ve won a deal.” In other words, it seems as if PAR’s decision to delay some revenue to win a big new customer will be rewarded, but the stock market doesn’t seem to think so. I believe that with time the market’s view will more closely match my own.”
PAR Technology Corporation (NYSE:PAR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 24 hedge fund portfolios held PAR Technology Corporation (NYSE:PAR) at the end of the third quarter, compared to 28 in the previous quarter. PAR Technology Corporation’s (NYSE:PAR) third quarter revenue increased nearly 23% to $119 million. While we acknowledge the risk and potential of PAR Technology Corporation (NYSE:PAR) 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 PAR Technology Corporation (NYSE:PAR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered PAR Technology Corporation (NYSE:PAR) and shared Bristlemoon Global Fund’s views on the company. Laughing Water Capital shared its strong conviction in PAR Technology Corporation (NYSE:PAR) in its Q3 2025 investor letter. 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.
