Here’s Why Tyler Technologies (TYL) Traded Down in Q3

Conestoga Capital Advisors, an asset management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their momentum that began in early April, reaching new all-time highs in the third quarter. Conestoga Smid Cap Composite underperformed the Russell 2500 Growth Index in the quarter and returned -1.1% net-of-fees vs +10.7% for the index. The narrow and “low quality” leadership in the stock market rally that began in April grew stronger in the third quarter. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its third-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Tyler Technologies, Inc. (NYSE:TYL). Tyler Technologies, Inc. (NYSE:TYL) offers integrated information management solutions and services for the public sector. The one-month return of Tyler Technologies, Inc. (NYSE:TYL) was -5.38%, and its shares lost 14.08% of their value over the last 52 weeks. On October 17, 2025, Tyler Technologies, Inc. (NYSE:TYL) stock closed at $505.60 per share, with a market capitalization of $21.873 billion.

Conestoga Capital Advisors stated the following regarding Tyler Technologies, Inc. (NYSE:TYL) in its third quarter 2025 investor letter:

“Tyler Technologies, Inc. (NYSE:TYL): The company provides integrated information management and software solutions to public sector agencies, including courts, schools, municipalities, and state governments across the U.S. The equity market has been concerned that DOGE or federal budgetary pressures will trickle down to TYL’s state and local municipalities customer’s budgets. While the company has seen a select number of scattered delays or cancellations, the company has not experienced any change in public demand or purchasing behavior, and budgets have remained stable.”

Is Tyler Technologies, Inc. (TYL) the Best Big Data Stock to Buy According to Analysts?

Tyler Technologies, Inc. (NYSE:TYL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 46 hedge fund portfolios held Tyler Technologies, Inc. (NYSE:TYL) at the end of the second quarter, up from 44 in the previous quarter. In the second quarter of 2025, Tyler Technologies, Inc. (NYSE:TYL) reported $596.1 million in revenue, representing an increase of 10.2% compared to Q2 2024. While we acknowledge the risk and potential of Tyler Technologies, Inc. (NYSE:TYL) 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 Tyler Technologies, Inc. (NYSE:TYL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Tyler Technologies, Inc. (NYSE:TYL) and shared Artisan Mid Cap Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 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.