Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equities hit a record high in the third quarter, fueled by continued gains in technology and falling bond yields. Easing tariff rhetoric and renewed AI infrastructure investments boosted large tech stocks. In mid-September U.S. Federal Reserve lowered rates by 25 basis points. In this environment, the fund returned 6.72% (net) during the quarter, underperforming the 9.00% returns of the Russell 2500 Index and 8.18% returns of the secondary benchmark, the Russell 2500 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Meridian Contrarian Fund highlighted stocks such as Penguin Solutions, Inc. (NASDAQ:PENG). Penguin Solutions, Inc. (NASDAQ:PENG) is a leading enterprise solutions provider. The one-month return of Penguin Solutions, Inc. (NASDAQ:PENG) was -6.32%, and its shares gained 3.49% of their value over the last 52 weeks. On December 01, 2025, Penguin Solutions, Inc. (NASDAQ:PENG) stock closed at $20.16 per share, with a market capitalization of $1.066 billion.
Meridian Contrarian Fund stated the following regarding Penguin Solutions, Inc. (NASDAQ:PENG) in its third quarter 2025 investor letter:
“Penguin Solutions, Inc. (NASDAQ:PENG) is a diversified technology company that designs and manufactures solutions in the computing, memory, and LED industries. We first invested in the company in 2020 on the heels of an earnings decline due to volatility in the memory business, order delays in its high performance computing segment, and temporarily dilutive investments in new products.
Penguin Solutions, Inc. (NASDAQ:PENG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Penguin Solutions, Inc. (NASDAQ:PENG) at the end of the third quarter, which was 25 in the previous quarter. In the fourth quarter of fiscal 2025, Penguin Solutions, Inc. (NASDAQ:PENG) reported revenue of $338 million, an increase of 9% year-over-year. While we acknowledge the potential of Penguin Solutions, Inc. (NASDAQ:PENG) 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.
