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 Mid Cap Composite returned 3.46% net-of-fees in the quarter, trailing the Russell Mid Cap Growth Index’s 18.20% return. After a strong first quarter in 2025, investor enthusiasm shifted towards high-beta and AI stocks following the “Liberation Day” announcements, creating a narrow leadership group that posed challenges for the Mid Cap Strategy in the second quarter. 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 Bentley Systems, Incorporated (NASDAQ:BSY). Bentley Systems, Incorporated (NASDAQ:BSY) is an infrastructure engineering software solutions provider. The one-month return of Bentley Systems, Incorporated (NASDAQ:BSY) was 8.56%, and its shares gained 20.63% of their value over the last 52 weeks. On July 25, 2025, Bentley Systems, Incorporated (NASDAQ:BSY) stock closed at $58.59 per share, with a market capitalization of $17.775 billion.
Conestoga Capital Advisors stated the following regarding Bentley Systems, Incorporated (NASDAQ:BSY) in its second quarter 2025 investor letter:
“Bentley Systems, Incorporated (NASDAQ:BSY), a provider of infrastructure engineering software, outperformed the benchmark in 2Q, delivering its thirteenth consecutive quarter of double-digit annual recurring revenue growth (ARR). Management saw strength in Public Works, Utilities, and Small/Medium sized customers, as well as a resilient infrastructure spending environment, underpinned by the flow through in government funding (IIJA).”
A computer engineer in front of his screen monitoring a 3D model of a building, representing the company’s open modeling and open simulation applications.
Bentley Systems, Incorporated (NASDAQ:BSY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 38 hedge fund portfolios held Bentley Systems, Incorporated (NASDAQ:BSY) at the end of the first quarter compared to 35 in the previous quarter. Bentley Systems, Incorporated (NASDAQ: BSY) reported total revenues of $371 million for the first quarter, representing a 10% increase compared to the previous year and an 11% rise on a constant currency basis. While we acknowledge the potential of Bentley Systems, Incorporated (NASDAQ:BSY) 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.