Meridian Funds, managed by ArrowMark Partners, released its “Meridian Growth Fund” fourth-quarter 2025 investor letter. A copy of the same can be downloaded here. U.S. equity markets experienced a quarter shaped by optimism around potential monetary easing and caution related to economic growth and valuations. Early gains were driven by strong AI-related earnings and the US Federal Reserve’s rate cut in October. However, market sentiment cooled later in the quarter due to mixed signals from the Fed regarding future policy. Despite this moderation, the quarter contributed positively to robust annual results, with large caps rising 17.4% for the year and 2.4% in the quarter, while small caps gained 12.8% for the year and 2.2% in the quarter. Value stocks outperformed growth, returning 3.3% versus 1.2% for the quarter. Market factors and sector effects were mixed in the quarter. Against this backdrop, the Fund delivered a return of -0.39% (net) in the quarter, underperforming the Russell 2500 Growth Index’s 0.33% return. As the market heads into 2026, the firm is closely watching the factors that may affect market returns, including monetary policy changes with a new Fed Chair and the sustainability of AI investments due to high valuations among hyperscalers. The firm continues to focus on high-quality businesses with strong competitive advantages, solid balance sheets, and clear sustainable earnings growth. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Meridian Growth Fund highlighted Certara, Inc. (NASDAQ:CERT) as one of its leading relative detractors. Certara, Inc. (NASDAQ:CERT) offers software products and technology-enabled services to customers for bio-simulation. Certara, Inc. (NASDAQ:CERT) shares traded between $8.03 and $15.69 over the past 52 weeks. On January 26, 2026, Certara, Inc. (NASDAQ:CERT) stock closed at $10.11 per share. One-month return of Certara, Inc. (NASDAQ:CERT) was 14.11%, and its shares lost 16.65% of their value over the last three months. Certara, Inc. (NASDAQ:CERT) has a market capitalization of $1.61 billion.
Meridian Growth Fund stated the following regarding Certara, Inc. (NASDAQ:CERT) in its fourth quarter 2025 investor letter:
“Certara, Inc. (NASDAQ:CERT) develops software and services that support drug development through biosimulation, modeling how investigational compounds interact at varied dosing levels with organs and other drugs. While the technology remains relatively early in adoption, a large majority of recent FDA approved drugs used a Certara solution at some point in the development process. During the quarter, the company underperformed due to weaker-than-expected service bookings, which prompted management to slightly lower guidance. However, with the recent appointment of a new CEO who is adopting a more commercially focused strategy, as well as the potential divestiture of a non-core, lower-moat business segment, Certara is positioned to transform into a more focused, pure-play growth company.”
Certara, Inc. (NASDAQ:CERT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 27 hedge fund portfolios held Certara, Inc. (NASDAQ:CERT) at the end of the third quarter, compared to 30 in the previous quarter. Certara, Inc. (NASDAQ:CERT) posted Q3 2025 revenue of $104.6 million, in line with expectations and up 10% year-over-year. While we acknowledge the risk and potential of Certara, Inc. (NASDAQ:CERT) 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 Certara, Inc. (NASDAQ:CERT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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.
