Veracyte (VCYT) Shares Pulled Back Despite Beating Expectations

Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Investor sentiment at the beginning of 2025 was positive. In 2024, US equities once again outperformed their global counterparts, and there was optimism that the new Republican administration would strengthen the idea of US exceptionalism. However, the first quarter did not meet those expectations. In the quarter, its Investor Class fund ARTSX returned -10.14%, Advisor Class fund APDSX posted a return of -10.10%, and Institutional Class fund APHSX returned -10.07%, compared to a return of -11.12% for the Russell 2000 Growth Index. Markets experienced weakness due to rising fiscal and geopolitical uncertainties during the quarter. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its first-quarter 2025 investor letter, Artisan Small Cap Fund highlighted stocks such as Veracyte, Inc. (NASDAQ:VCYT). Incorporated in 2006, Veracyte, Inc. (NASDAQ:VCYT) is a diagnostics company. The one-month return of Veracyte, Inc. (NASDAQ:VCYT) was 13.27%, and its shares gained 24.50% of their value over the last 52 weeks. On June 2, 2025, Veracyte, Inc. (NASDAQ:VCYT) stock closed at $26.74 per share, with a market capitalization of $2.076 billion.

Artisan Small Cap Fund stated the following regarding Veracyte, Inc. (NASDAQ:VCYT) in its Q1 2025 investor letter:

“Among our top detractors were Veracyte, Inc. (NASDAQ:VCYT), MACOM and Dayforce. Veracyte specializes in improving diagnostic accuracy by combining RNA sequencing, machine learning and the company’s proprietary “field of injury” technology. The company has been harvesting profits from its existing products and investing in new genetic tests to detect diseases, including prostate and thyroid cancer. We believe its new tests could reduce the number of surgeries performed on patients with indeterminate results from other types of testing and save the health care system unnecessary overtreatment costs. After a period of strong performance in 2024, shares pulled back in Q1. The company beat expectations, but it announced plans to walk away from its French subsidiary. While we believe this is the right thing to do for the long-term profit cycle, it introduces near-term uncertainty.”

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Veracyte, Inc. (NASDAQ:VCYT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Veracyte, Inc. (NASDAQ:VCYT) at the end of the first quarter, which was 30 in the previous quarter. Veracyte, Inc. (NASDAQ:VCYT) generated revenue of $114.5 million in the first quarter of fiscal 2025, marking a 18% increase from last year’s comparable quarter.  While we acknowledge the potential of Veracyte, Inc. (NASDAQ:VCYT) 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 undervalued AI stock set for massive gains.

In another article, we covered Veracyte, Inc. (NASDAQ:VCYT) and shared AI news and ratings on investors’ radar. In its Q4 2024 investor letter, Artisan Small Cap Fund noted that Veracyte, Inc. (NASDAQ:VCYT) surged following the company’s strong earnings report. In addition, please check out our hedge fund investor letters Q1 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.