SoundThinking’s (SSTI) Earnings Fall Short of Estimates Amid Increased AI Investment and Tariff Challenges

Conestoga Capital Advisors, an asset management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter began with a historically poor start but gained momentum later as tariff fears subsided and market volatility dropped precipitously. Conestoga Micro Cap Composite appreciated 15.65% net-of-fees in the second quarter but underperformed the Russell Microcap Growth Index’s 20.92% return. In a highly volatile market led by high-beta and lower-quality stocks, the firm does not expect the fund to align with index performance. Please review the fund’s top 5 holdings to gain insight into their key selections for 2025.

In its second quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as SoundThinking, Inc. (NASDAQ:SSTI). SoundThinking, Inc. (NASDAQ:SSTI) is a public safety technology company. The one-month return of SoundThinking, Inc. (NASDAQ:SSTI) was -7.09%, and its shares lost 18.26% of their value over the last 52 weeks. On July 25, 2025, SoundThinking, Inc. (NASDAQ:SSTI) stock closed at $12.13 per share, with a market capitalization of $153.725 million.

Conestoga Capital Advisors stated the following regarding SoundThinking, Inc. (NASDAQ:SSTI) in its second quarter 2025 investor letter:

“SoundThinking, Inc. (NASDAQ:SSTI) develops and sells a Saas based gunfire detection system to help city governments around the world detect and respond to gun violence. SSTI delivered mixed 1Q results with earnings missing the consensus estimates due to more investment in AI and a negative impact from tariffs. We still see SSTI as targeting an underpenetrated market with superior technology to help law enforcement identify gun incidents.”

An aerial view of a city showing the presence of public safety solutions such as Shot Spotter All in One.

SoundThinking, Inc. (NASDAQ:SSTI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 12 hedge fund portfolios held SoundThinking, Inc. (NASDAQ:SSTI) at the end of the first quarter compared to 15 in the previous quarter. While we acknowledge the risk and potential of SoundThinking, Inc. (NASDAQ:SSTI) 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 SoundThinking, Inc. (NASDAQ:SSTI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered SoundThinking, Inc. (NASDAQ:SSTI) and shared Conestoga Capital Advisors’ views on the company in the previous quarter. 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.