Conestoga Capital Advisors, an asset management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets started the year with a rally due to optimism about a strong economy and expectations of moderating inflation and lower interest rates. However, concerns over slowing earnings from major Technology companies, geopolitical tensions, and an upcoming announcement on tariffs led to a sharp decline in equities by the end of the first quarter. Investors sought safety, driving U.S. Treasury yields down. The Conestoga Small Cap Composite returned -11.35% (net) in the first quarter compared to the Russell 2000 Growth Index’s -11.12% return. The Conestoga SMid Cap Composite returned -5.73% compared to the Russell 2500 Growth Index’s -10.80% return. The Conestoga Micro-Cap Composite returned -8.24% vs the Russell Microcap Growth Index’s return of -17.75%. Finally, the Conestoga Mid Cap Composite returned 0.96% (net), compared to the Russell Midcap Growth Index’s -7.12% return. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.
In its first-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Palomar Holdings, Inc. (NASDAQ:PLMR). Palomar Holdings, Inc. (NASDAQ:PLMR), with a market capitalization of $3.954 billion, is a specialty insurance company. The one-month return of Palomar Holdings, Inc. (NASDAQ:PLMR) was 6.76%, and its shares gained 88.01% of their value over the last 52 weeks. On April 29, 2025, Palomar Holdings, Inc. (NASDAQ:PLMR) stock closed at $147.91 per share.
Conestoga Capital Advisors stated the following regarding Palomar Holdings, Inc. (NASDAQ:PLMR) in its Q1 2025 investor letter:
“After a strong 2024, shares of Palomar Holdings, Inc. (NASDAQ:PLMR) appreciated during the first quarter as the company’s results remain robust. PLMR reported its ninth consecutive earnings beat during the quarter as organic growth remained robust across the firm’s insurance portfolio. PLMR should grow revenue by greater than 20% in 2025. Core earthquake lines of business remain dislocated (good for PLMR) and PLMR is gaining momentum in inland marine, crop, and niche property markets. In addition, PLMR has near industry leading margins with an adjusted combined ratio in the low-70’s.”
A real estate investment banker sitting in a plush office, reviewing financials and papers.
Palomar Holdings, Inc. (NASDAQ:PLMR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Palomar Holdings, Inc. (NASDAQ:PLMR) at the end of the fourth quarter, compared to 24 in the third quarter. While we acknowledge the potential of Palomar Holdings, Inc. (NASDAQ:PLMR) 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 cheapest AI stock.
In another article, we covered Palomar Holdings, Inc. (NASDAQ:PLMR) and shared the list of insurance stocks that are skyrocketing so far in 2025. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
175 Teslas
107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.
It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.
Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
How could anything be worth that much?
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In fact, Verge argues this company’s supercheap AI technology should concern rivals.
Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.
Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.
Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…
But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.
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