Soumya Eswaran
3 min read
In This Article:
Parnassus Investments, an investment management company, released the “Parnassus Growth Equity Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the Fund (Investor Shares) returned -8.59% (net of fees), outperforming the Russell 1000 Growth Index’s -9.97% decline. In the first quarter, post-election optimism, driven by reduced regulation and a business-friendly environment, drifted away to concerns over fiscal and tariff uncertainties, which increased volatility and raised fears of a recession. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Parnassus Growth Equity Fund highlighted stocks such as AppFolio, Inc. (NASDAQ:APPF). AppFolio, Inc. (NASDAQ:APPF) offers cloud business management solutions for the real estate industry. The one-month return of AppFolio, Inc. (NASDAQ:APPF) was 8.58%, and its shares lost 6.25% of their value over the last 52 weeks. On June 26, 2025, AppFolio, Inc. (NASDAQ:APPF) stock closed at $229.29 per share, with a market capitalization of $8.261 billion.
Parnassus Growth Equity Fund stated the following regarding AppFolio, Inc. (NASDAQ:APPF) in its Q1 2025 investor letter:
"AppFolio, Inc. (NASDAQ:APPF), a comprehensive, cloud-based property management software platform, has high switching costs and pricing power, making its revenues relatively sticky. The company has been a market share gainer with growth potential by moving upmarket and expanding into commercial and international markets."
A close-up shot of a user-friendly and customizable interface of the company's software, designed to suit different workflows.
AppFolio, Inc. (NASDAQ:APPF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held AppFolio, Inc. (NASDAQ:APPF) at the end of the first quarter, which was 40 in the previous quarter. AppFolio, Inc.'s (NASDAQ:APPF) revenue in the first quarter grew 16% year over year to $218 million. While we acknowledge the potential of AppFolio, Inc. (NASDAQ:APPF) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered AppFolio, Inc. (NASDAQ:APPF) and shared the list of best oversold tech stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of APPF 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.
