Parnassus Investments, an investment management company, released the “Parnassus Mid Cap Fund” fourth-quarter 2025 investor letter. A copy of the letter is available to download here. The Q4 2025 marked the fund’s consecutive quarter of outperformance, returning 1.17% (net of fees) in the quarter, surpassing 0.16% return for the Russell Midcap Index. The performance was supported by investments in the Information Technology sector, as well as holdings in Utilities. During the quarter, the market started to grow beyond artificial intelligence. YTD, the Fund returned 12.85% (net of fees) compared to 10.60% return for the index. Looking ahead to 2026, the Fund is optimistic, as mid-cap stocks may drive the market upward if economic growth continues to expand beyond AI. In the event of a market decline, the Fund believes that its portfolio of leading companies with solid financial positions will provide downside protection. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Parnassus Mid Cap Fund highlighted stocks like Guidewire Software, Inc. (NYSE:GWRE). Guidewire Software, Inc. (NYSE:GWRE) is a leading provider of cloud-based software for property and casualty (P&C) insurance companies. On March 30, 2026, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $144.90 per share. Guidewire Software, Inc. (NYSE:GWRE) delivered a -4.63% return in the past month, and its shares lost 23.96% over the past twelve months. Guidewire Software, Inc. (NYSE:GWRE) has a market capitalization of $12.27 billion.
Parnassus Mid Cap Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its fourth quarter 2025 investor letter:
“We exited three stocks as we felt their valuations were too high for their expected growth rates. We exited Guidewire Software, Inc. (NYSE:GWRE) because it had fulfilled our investment thesis and return target and we saw opportunities to redeploy the capital.”
Guidewire Software, Inc. (NYSE:GWRE) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 69 hedge fund portfolios held Guidewire Software, Inc. (NYSE:GWRE) at the end of the fourth quarter, compared to 72 in the previous quarter. While we acknowledge the risk and potential of Guidewire Software, Inc. (NYSE:GWRE) 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 Guidewire Software, Inc. (NYSE:GWRE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Guidewire Software, Inc. (NYSE:GWRE) and shared Artisan Small Cap Fund’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.
