Meridian Funds, managed by ArrowMark Partners, released its Q4 2025 investor letter for the “Meridian Small Cap Growth Fund.” A copy of the letter can be downloaded here. U.S. stock markets navigated a quarter supported by optimism about possible monetary easing and caution over economic growth and valuations. The initial gains were driven by strong AI-related gains and the US Federal Reserve’s rate cut in October, which improved expectations for financial conditions. However, market sentiment cooled later in the quarter. Despite this moderation, the quarter contributed positively to solid annual results. Small caps returned 12.8% annually with a gain of 2.2% in the fourth quarter. Value outperformed growth according to the Russell family of indexes. In Q4 2025, the Meridian Small Cap Growth Fund returned 0.90% (net) compared to the Russell 2000 Growth Index’s return of 1.22%. Also, check out the Fund’s top five holdings to learn your best picks in 2025.
In its Q4 2025 investor letter, Meridian Small Cap Growth Fund highlighted stocks like Axogen, Inc. (NASDAQ:AXGN). Axogen, Inc. (NASDAQ:AXGN) is a leader in the development and commercialization of technologies for peripheral nerve regeneration and repair. On February 18, 2026, Axogen, Inc. (NASDAQ:AXGN) stock closed at $35.25 per share. Axogen, Inc. (NASDAQ:AXGN)’s monthly performance was 10.16% and its shares have risen 90.54% in the past twelve months. Axogen, Inc. (NASDAQ:AXGN) has a market capitalization of $1.768 billion.
Meridian Small Cap Growth Fund stated the following regarding Axogen, Inc. (NASDAQ:AXGN) in its Q4 2025 investor letter:
“Axogen, Inc. (NASDAQ:AXGN) is a leader in the development of technologies focused on peripheral nerve regeneration and repair. The company’s biologically active nerve graft platform reduces procedural risks by eliminating the need for secondary surgical sites. The stock advanced during the quarter following several positive developments, including accelerated revenue growth of 20% and gross margins of nearly 77%, which exceeded investor expectations. Additionally, the company’s flagship product received favorable reimbursement terms, which should support broader hospital adoption and improved revenue growth. Perhaps most notably, the FDA approved BLA submission for a key therapy without restrictive labeling, granting 12 years of market exclusivity and expanding the company’s commercial coverage and growth runway.”
Axogen, Inc. (NASDAQ:AXGN) isn’t on our list of the 30 most popular stocks among hedge funds. According to our database, 20 hedge fund portfolios owned Axogen, Inc. (NASDAQ:AXGN) at the end of the third quarter, compared to 21 in the previous quarter. While we recognize the potential of Axogen, Inc. (NASDAQ:AXGN) as an investment, we believe certain AI stocks offer greater growth potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.