TimesSquare Capital Management, an equity investment management company, released its “U.S. Mid Cap Growth Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. At the beginning of 2025, a general sense of optimism prevailed among businesses and markets. The expectations for a pro-business atmosphere with reduced regulatory burdens boosted global markets in January. However, in February, delays and uncertainties surrounding U.S. policies led to a more cautious market response, culminating in a significant decline in March. In this environment, the strategy returned -3.29% (gross) and -3.48% (net) while the Russell Midcap Growth Index returned -7.12%. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, TimesSquare Capital U.S. Mid Cap Growth Strategy highlighted stocks such as JFrog Ltd. (NASDAQ:FROG). Incorporated in 2008, JFrog Ltd. (NASDAQ:FROG) is a technology company that provides a software supply chain platform. The one-month return of JFrog Ltd. (NASDAQ:FROG) was -2.90%, and its shares gained 28.02% of their value over the last 52 weeks. On June 18, 2025, JFrog Ltd. (NASDAQ:FROG) stock closed at $41.53 per share, with a market capitalization of $4.758 billion.
TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding JFrog Ltd. (NASDAQ:FROG) in its Q1 2025 investor letter:
“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that are growing their shares of corporate IT budgets. Jumping ahead by 9% was JFrog Ltd. (NASDAQ:FROG), which provides systems to manage and speed up the release of software updates from developers to users. We added to our position in February with the view that the wider creation or adoption of GenAI applications for businesses would generate greater activity volumes for JFrog. That outlook was supported by the company’s subsequent report. Revenues, earnings, and forward guidance were all higher than anticipated as JFrog closed several multi-million-dollar deals along with higher rates of mid and smaller sized contracts. After that report, we met with JFrog’s management and discussed its initial successes cross selling additional security services. Thus, when its price retreated in March, we bought additional shares in JFrog.”
A corporate executive standing in front of a large monitor, demonstrating the DevOps package repository.
JFrog Ltd. (NASDAQ:FROG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held JFrog Ltd. (NASDAQ:FROG) at the end of the first quarter, which was 32 in the previous quarter. In the first quarter of 2025, JFrog Ltd. (NASDAQ:FROG) reported revenue of $122.4 million, up 22% year-over-year. While we acknowledge the potential of JFrog Ltd. (NASDAQ:FROG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered JFrog Ltd. (NASDAQ:FROG) and shared the list of unstoppable growth stocks to invest in. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of FROG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
