Kornit Digital Ltd. (KRNT) Slid on Concerns over Macro-Driven Uncertainty

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities saw their weakest quarterly performance since 2022, as uncertainty about potential tariff policies affected investor sentiment and risk assets. In this environment, the fund returned -7.59% (net) during the quarter, slightly behind the -7.50% returns of the Russell 2500 Index and underperforming the -5.83% returns of the secondary benchmark, the Russell 2500 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Meridian Contrarian Fund highlighted stocks such as Kornit Digital Ltd. (NASDAQ:KRNT). Kornit Digital Ltd. (NASDAQ:KRNT) designs and markets digital textile printing solutions. The one-month return of Kornit Digital Ltd. (NASDAQ:KRNT) was 15.51%, and its shares gained 57.10% of their value over the last 52 weeks. On May 29, 2025, Kornit Digital Ltd. (NASDAQ:KRNT) stock closed at $22.34 per share, with a market capitalization of $1.013 billion.

Meridian Contrarian Fund stated the following regarding Kornit Digital Ltd. (NASDAQ:KRNT) in its Q1 2025 investor letter:

“Kornit Digital Ltd. (NASDAQ:KRNT) is a leading provider of digital textile printing solutions, offering a more efficient and sustainable alternative to traditional screen printing for apparel and textiles. Its digitally enabled process requires fewer people, less energy, and less water. We initiated our investment last year after a prolonged stock decline from $180 to below $20, driven by volatile orders and macroeconomic concerns, including elevated interest rates. The stock contributed positively to fund performance last year, as demand stabilized and orders improved, supported in part by the company’s innovative product offerings and go-to-market strategies. However, shares came under renewed pressure in the first quarter due to macro-driven uncertainty around the durability of Kornit’s order pipeline. We modestly trimmed our position early in the quarter at higher levels and continue to hold shares based on long-term secular growth potential in digital textile printing and onshoring trends. Kornit’s solid balance sheet, including approximately $10 per share in net cash, reinforces our confidence in its ability to weather near-term challenges.”

An industrial printing machine churning out specialized orders for a major client.

Kornit Digital Ltd. (NASDAQ:KRNT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Kornit Digital Ltd. (NASDAQ:KRNT) at the end of the first quarter, which was 17 in the previous quarter. While we acknowledge the potential of Kornit Digital Ltd. (NASDAQ:KRNT) 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 Kornit Digital Ltd. (NASDAQ:KRNT) and shared Wasatch Micro-Cap Growth-U.S. Strategy’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 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.