Prosper Stars & Stripes, a long/short equity fund, recently released its first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund underperformed and generated a net return of -9.7% compared to a total return of -9.5% for the long-only small cap Russell 2000 Index (the “Russell”), and a total return of 0.2% for the long/short equity hedge fund peer group represented by the HFRX Equity Hedge Index (the “HFRX”). A combination of factors led the composite to underperform compared to its net exposure at the start of the year. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Prosper Stars & Stripes Fund highlighted stocks such as Xometry, Inc. (NASDAQ:XMTR). Xometry, Inc. (NASDAQ:XMTR) is an AI-powered online marketplace that helps buyers to source custom-manufactured parts. The one-month return of Xometry, Inc. (NASDAQ:XMTR) was -12.14%, and its shares gained 144.54% of their value over the last 52 weeks. On June 16, 2025, Xometry, Inc. (NASDAQ:XMTR) stock closed at $30.69 per share, with a market capitalization of $1.56 billion.
Prosper Stars & Stripes Fund stated the following regarding Xometry, Inc. (NASDAQ:XMTR) in its Q1 2025 investor letter:
“Lastly, changing global supply chains will benefit certain companies. Two examples of this are Xometry, Inc. (NASDAQ:XMTR) and Kornit Digital Ltd (KRNT). XMTR runs a localized marketplace for customized parts and production matching user’s needs with local production. We believe both businesses ought to benefit from the rapidly changing trade backdrop and that both have unique business models with strong, scalable financial profiles.”
A machinist operating a CNC machine in a well-lit facility, scrutinizing the quality of a part.
Xometry, Inc. (NASDAQ:XMTR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Xometry, Inc. (NASDAQ:XMTR) at the end of the first quarter, which was 14 in the previous quarter. Xometry, Inc.’s (NASDAQ:XMTR) first quarter revenue increased 23% year-over-year to a record $151 million. While we acknowledge the potential of Xometry, Inc. (NASDAQ:XMTR) 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 Xometry, Inc. (NASDAQ:XMTR) and shared the Alger Small Cap Focus Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of XMTR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
