Varied Growth Drivers Lifted nLIGHT (LASR) in Q3

LASR +1.50%

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 NLIGHT, Inc. (NASDAQ:LASR). NLIGHT, Inc. (NASDAQ:LASR) is a technology company that designs, develops, manufactures, and sells semiconductor and fiber lasers. The one-month return of NLIGHT, Inc. (NASDAQ:LASR) was 8.77%, and its shares gained 218.54% of their value over the last 52 weeks. On November 28, 2025, NLIGHT, Inc. (NASDAQ:LASR) stock closed at $35.23 per share, with a market capitalization of $1.789 billion.

Meridian Contrarian Fund stated the following regarding NLIGHT, Inc. (NASDAQ:LASR) in its third quarter 2025 investor letter:

"NLIGHT, Inc. (NASDAQ:LASR) is a leading provider of high-power lasers serving the medical, industrial, and increasingly, defense markets. We initially invested in nLight as they transitioned the company to focus on laser defense applications that shield our troops from drones and enemy missiles. This represented new high-value customers to offset commoditized applications in industrial markets overrun by Chinese-manufactured low-cost lasers. During the quarter, investors re-rated the stock higher in recognition of the growing size of nLight’s addressable markets and its leadership position within them. We remain investors after trimming part of the position on strength as part of our disciplined risk management process."

NLIGHT, Inc. (NASDAQ:LASR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held NLIGHT, Inc. (NASDAQ:LASR) at the end of the third quarter, which was 30 in the previous quarter. NLIGHT, Inc. (NASDAQ:LASR) reported revenue of $67 million in Q3 2025, grew 19% year-over-year. While we acknowledge the potential of NLIGHT, Inc. (NASDAQ:LASR) 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.

In another article, we covered NLIGHT, Inc. (NASDAQ:LASR) and shared the list of hottest small cap stocks to buy. In addition, please check out our hedge fund investor letters Q3 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.