Kyndryl Holdings (KD) Fell Following Weak Bookings

Loomis Sayles, an investment management company, released its “Small Cap Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equities delivered strong results in the third quarter, mainly driven by easing tariff concerns, a pro-growth budget passed by the U.S. Congress, and anticipation of the Federal Reserve’s further rate cuts. The fund returned 6.21% in the quarter compared to 12.60% for the Russell 2000 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Loomis Sayles Small Cap Value Fund highlighted stocks such as Kyndryl Holdings, Inc. (NYSE:KD). Kyndryl Holdings, Inc. (NYSE:KD) is a technology services company and IT infrastructure services provider. The one-month return of Kyndryl Holdings, Inc. (NYSE:KD) was 7.23%, and its shares lost 22.03% of their value over the last 52 weeks. On December 24, 2025, Kyndryl Holdings, Inc. (NYSE:KD) stock closed at $27.28 per share, with a market capitalization of $6.306 billion.

Loomis Sayles Small Cap Value Fund stated the following regarding Kyndryl Holdings, Inc. (NYSE:KD) in its third quarter 2025 investor letter:

“The market leadership change toward “risk-on” and “low-quality” stocks is common around market pivot points and has continued into the third quarter of the year. Regarding our Fund, stock selection measures trailed the index given the style mismatch with our high quality approach. From an individual stock perspective Haemonetics Corporation, Alight, Inc. and Kyndryl Holdings, Inc. (NYSE:KD) detracted the most from performance.

Kyndryl is the largest third-party provider of data center operations, spun off from IBM in 2021 with significant scale and extensive customer relationships. Gross margins were low initially, burdened by several existing low-to-no margin contracts IBM had established within product bundles to sell higher margin hardware and software applications. Now, as a stand-alone company, Kyndryl has spent the last three years establishing new growth opportunities, and re-pricing long-term service contracts now up for renewal which has improved contract terms and expanded service offerings, driving early share gains. The share price underperformed this quarter, however, after reporting weak bookings in the important consulting business which will cause inconsistent future sales growth. While the Fund has maintained its position, we are more critical of future quarterly execution.”

In another article, we covered Kyndryl Holdings, Inc. (NYSE:KD) and shared the list of best affordable AI stocks to buy. 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.