Should You Sell Your Stake in PagerDuty (PD)?

Renaissance Investment Management, an investment management company, released its Q2 2025 “Small Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. The stock market was highly volatile in the second quarter. The unexpected tariff announcement panicked the market, causing stock prices to drop 7% from April 2 to April 7. The market experienced a dramatic recovery following the Trump Administration’s backing away from some of its more extreme tariff proposals. Sound corporate earnings levels and solid economic data suggest positive economic growth ahead. The Russell 2000 Growth Index rallied in the second quarter; the strategy also rallied and outperformed the index. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, Renaissance Investment Small Cap Growth Strategy highlighted stocks such as PagerDuty, Inc. (NYSE:PD). PagerDuty, Inc. (NYSE:PD) is a digital operations management platform. The one-month return of PagerDuty, Inc. (NYSE:PD) was -0.06%, and its shares lost 10.33% of their value over the last 52 weeks. On September 19, 2025, PagerDuty, Inc. (NYSE:PD) stock closed at $16.32 per share, with a market capitalization of $1.522 billion.

Renaissance Investment Small Cap Growth Strategy stated the following regarding PagerDuty, Inc. (NYSE:PD) in its second quarter 2025 investor letter:

“We exited our position in PagerDuty, Inc. (NYSE:PD) as the company has struggled to reaccelerate revenue growth to double-digit levels due to continuous execution challenges and go-to-market changes. Additionally, the company is seeing increased competition from larger competitors that are looking to consolidate the market.”

PagerDuty, Inc. (NYSE:PD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 31 hedge fund portfolios held PagerDuty, Inc. (NYSE:PD) at the end of the second quarter, down from 36 in the previous quarter. In the fiscal second quarter of 2026 PagerDuty, Inc. (NYSE:PD) reported revenue of $123 million, representing 6% growth year over year. While we acknowledge the risk and potential of PagerDuty, Inc. (NYSE:PD) 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 PagerDuty, Inc. (NYSE:PD) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered PagerDuty, Inc. (NYSE:PD) and shared the list of best tech stocks to buy according to Cathie Wood. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.