Kornit Digital, Ltd. (KRNT) Rose in Q3 on Stabilized Demand

KRNT -2.18%

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 Kornit Digital Ltd. (NASDAQ:KRNT). Kornit Digital Ltd. (NASDAQ:KRNT) designs and markets digital textile printing solutions. The one-month return of Kornit Digital Ltd. (NASDAQ:KRNT) was -6.46%, and its shares lost 57.87% of their value over the last 52 weeks. On November 28, 2025, Kornit Digital Ltd. (NASDAQ:KRNT) stock closed at $13.33 per share, with a market capitalization of $612.816 million.

Meridian Contrarian Fund stated the following regarding Kornit Digital Ltd. (NASDAQ:KRNT) in its third quarter 2025 investor letter:

"Kornit Digital Ltd. (NASDAQ:KRNT) is a leading provider of digital textile printing solutions, offering a more efficient and sustainable alternative to traditional screen printing for apparel and textiles. Its digitally enabled process requires fewer people, less energy, and less water. We initiated our investment last year after a prolonged stock decline from $180 to below $20, driven by volatile orders and macroeconomic concerns, including elevated interest rates. The stock contributed positively to fund performance last year, as demand stabilized and orders improved, supported in part by the company’s innovative product offerings and go-to-market strategies. However, shares have been weak in 2025 as macro and tariff issues have delayed orders and created uncertainty, but we continue to own the stock. In our experience, the combination of a leading technology, a large emerging addressable market, a strong balance sheet (>$10/share in cash), and reasonable valuation ( 0.7x EV/sales), are good reasons for patience."

Kornit Digital Ltd. (NASDAQ:KRNT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Kornit Digital Ltd. (NASDAQ:KRNT) at the end of the third quarter, which was 15 in the previous quarter. Kornit Digital Ltd.'s (NASDAQ:KRNT) revenues reached $53.1 million in Q3 2025, which is within the guidance range of $49 million to $55 million that was provided in August. While we acknowledge the potential of Kornit Digital Ltd. (NASDAQ:KRNT) 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 Kornit Digital Ltd. (NASDAQ:KRNT) and shared Prosper Stars & Stripes Fund's views on the company in the previous quarter. 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.