Grid Dynamics Holdings (GDYN) Fell Due to Overly Aggressive Guidance

Loomis Sayles, an investment management company, released its “Small Cap Growth Fund” investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. The second quarter started with significant volatility but concluded at an all-time high for the S&P 500. The fund returned 9.37%, underperforming the Russell 2000 Growth Index's 11.97% return due to security selection within the information technology and financial sectors.  In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Loomis Sayles Small Cap Growth Fund highlighted stocks such as Grid Dynamics Holdings, Inc. (NASDAQ:GDYN). Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) is a technology company that provides technology consulting, platform and product engineering, and analytics services. The one-month return of Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) was -3.37%, and its shares lost 44.56% of their value over the last 52 weeks. On September 29, 2025, Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) stock closed at $7.74 per share, with a market capitalization of $676.513 million.

Loomis Sayles Small Cap Growth Fund stated the following regarding Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) in its second quarter 2025 investor letter:

"Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) struggled during the period mainly due to the guidance that the company gave in February, which was viewed by analysts as being overly aggressive. The company did not raise guidance for the fiscal year in May, breaking a three-quarter trend of ‘beat and raise’ reports. These dynamics along with broader pressures in the IT Service industry with companies cutting guidance have added to fears of potential earnings cut, which has exacerbated selling pressures on the stock."RBC Upgrades Church & Dwight to Outperform, Hikes Price Target to $114

Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 12 hedge fund portfolios held Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) at the end of the second quarter, down from 20 in the previous quarter. Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) reported revenue of $101.1 million in the second quarter of 2025, representing an increase of 21.7% compared to Q2 2024. While we acknowledge the potential of Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) 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.

Story Continues

In another article, we covered Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) and shared a list of best tech stocks under $10 to invest in. In its Q2 2025 investor letter, Renaissance Investment Small Cap Growth Strategy expressed its confidence in Grid Dynamics Holdings, Inc. (NASDAQ:GDYN)f. In addition, please check out our hedge fund investor letters Q2 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.

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