Loomis Sayles, an investment management company, released its fourth-quarter 2025 investor letter for “Small Cap Growth Fund”. A copy of the letter is available to download here. The small caps’ earnings are reaccelerating in 2025, as the firm forecasted a year ago. The market also experienced a low-quality rally within the small-cap space. Against this backdrop, the Small Cap Growth Fund underperformed the Russell 2000 Growth Index benchmark in the quarter, returning 0.51% vs. 1.22% for the benchmark. Heading into 2026, there are many reasons to feel positive about the economy, earnings growth, and the stock market. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Loomis Sayles Small Cap Growth Fund highlighted stocks like Varonis Systems, Inc. (NASDAQ:VRNS). Varonis Systems, Inc. (NASDAQ:VRNS) is a cybersecurity software company that provides AI-powered data protection technology. On March 24, 2026, Varonis Systems, Inc. (NASDAQ:VRNS) stock closed at $22.01 per share. One-month return of Varonis Systems, Inc. (NASDAQ:VRNS) was -3.13%, and its shares are down 47.21% over the past twelve months. Varonis Systems, Inc. (NASDAQ:VRNS) has a market capitalization of $2.595 billion
Loomis Sayles Small Cap Growth Fund stated the following regarding Varonis Systems, Inc. (NASDAQ:VRNS) in its fourth quarter 2025 investor letter:
“Varonis Systems, Inc. (NASDAQ:VRNS), Stride and Commvault Systems were the bottom individual detractors overall. Varonis designs and develops file analysis and data management software solutions. The company missed its quarterly projections by surprising investors and customers with an announcement to end its on-premises solution. This solution represented approximately 15% of revenue and after seeing low renewals, the company decided to pull the plug and instead focus on its successful SaaS platform. This surprise led to extreme volatility, which triggered our stop loss and we exited the name.”
Varonis Systems, Inc. (NASDAQ:VRNS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 31 hedge fund portfolios held Varonis Systems, Inc. (NASDAQ:VRNS) at the end of the fourth quarter, compared to 37 in the previous quarter. In Q4 2025, Varonis Systems, Inc. (NASDAQ:VRNS) reported total revenue of $173.4 million, reflecting an increase of 9% from Q4 2024. While we acknowledge the risk and potential of Varonis Systems, Inc. (NASDAQ:VRNS) 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 Varonis Systems, Inc. (NASDAQ:VRNS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Varonis Systems, Inc. (NASDAQ:VRNS) and shared Carillon Eagle Small Cap Growth 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.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. This article is originally published at Insider Monkey.
