Mairs & Power, an investment advisor, released the fourth-quarter 2025 investor letter for the “Mairs & Power Small Cap Fund.” A copy of the letter can be downloaded here. In 2025, artificial intelligence (AI) and market concentration dominated the market. Increased investment in technology and AI infrastructure drove rising valuations and corporate spending, leading to bubble-like tendencies. However, easing inflation, a Federal Reserve rate cut in Q4, and resilient corporate earnings provided some optimism. In this environment, the Fund returned 3.98% in 2025, trailing the Russell 2000 Total Return (TR) Index’s 12.81% gain, the S&P Small Cap 600 TR’s 6.02% return, and the Morningstar U.S. Fund Small Blend’s 7.68% gain. Macro headwinds affected smaller companies in 2025, but the second half of the year saw small-cap stocks gain as the labor market softened. Stock selection notably impacted performance, especially in Health Care, Information Technology, and Materials. While sector allocation positively contributed. Looking ahead to 2026, the Fund remains optimistic about small-cap stocks, which are expected to grow at or above the S&P 500’s rate. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Mairs & Power Small Cap Fund highlighted Medpace Holdings, Inc. (NASDAQ:MEDP) as one of its notable contributors. Medpace Holdings, Inc. (NASDAQ:MEDP) is a clinical research-based drug and medical device development services provider. The one-month return of Medpace Holdings, Inc. (NASDAQ:MEDP) was 5.90%, and its shares gained 73.57% of their value over the last 52 weeks. On April 2, 2026, Medpace Holdings, Inc. (NASDAQ:MEDP) stock closed at $498.34 per share, with a market capitalization of about $14.14 billion.
Mairs & Power Small Cap Fund stated the following regarding Medpace Holdings, Inc. (NASDAQ:MEDP) in its fourth quarter 2025 investor letter:
“Notable positive contributors for the Fund were Exact Sciences, Medpace Holdings, Inc., and nVent Electric. Medpace Holdings, Inc. (NASDAQ:MEDP)outperformed this year due to improvements in clinical trial cancellation trends within its pipeline, powered by GLP-1 strength.”
Medpace Holdings, Inc. (NASDAQ:MEDP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 52 hedge fund portfolios held Medpace Holdings, Inc. (NASDAQ:MEDP) at the end of the fourth quarter, up from 43 in the previous quarter. In Q4 2025, Medpace Holdings, Inc. (NASDAQ:MEDP) reported revenue of $708.5 million, represents a year-over-year increase of 32%. While we acknowledge the risk and potential of Medpace Holdings, Inc. (NASDAQ:MEDP) 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 Medpace Holdings, Inc. (NASDAQ:MEDP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Medpace Holdings, Inc. (NASDAQ:MEDP) and shared Giverny Capital Asset Management’s views on the company. 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.
