Soumya Eswaran

Mon, Jun 30, 2025, 5:41 AM3 min read

Mairs & Power, an investment advisor, released the “Mairs & Power Small Cap Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here.  The fund declined 11.04% in the quarter, lagging behind the Russell 2000 Total Return Index, which fell 9.48%, the S&P Small Cap 600 Total Return Index, which was down 8.93%, and the Morningstar U.S. Fund Small Blend Index, which declined 8.09%. Stock selection, with negative relative performance in Healthcare, Financials, Information Technology, and Real Estate sectors, led to the underperformance of the portfolio in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Mairs & Power Small Cap Fund highlighted stocks such as Cognex Corporation (NASDAQ:CGNX). Cognex Corporation (NASDAQ:CGNX) provides machine vision products that capture and analyze visual information to automate manufacturing and distribution tasks. The one-month return of Cognex Corporation (NASDAQ:CGNX) was 6.00%, and its shares lost 32.20% of their value over the last 52 weeks. On June 27, 2025, Cognex Corporation (NASDAQ:CGNX) stock closed at $31.46 per share, with a market capitalization of $5.281 billion.

Mairs & Power Small Cap Fund stated the following regarding Cognex Corporation (NASDAQ:CGNX) in its Q1 2025 investor letter:

"During the first quarter of 2025, we initiated a position in Cognex Corporation (NASDAQ:CGNX). Cognex, headquartered in Massachusetts, is a leading provider of computer vision systems for industrial automation. The company serves a diverse client base that includes automotive, semiconductor, logistics, healthcare and consumer goods manufacturers. Cognex’s embedded AI capabilities are promising, as they improve accuracy and productivity for their customers’ material handling processes, and their products reduce deployment complexity, which is a key differentiator in a competitive space."

A worker utilizing a vision sensor to verify discrete items.

Cognex Corporation (NASDAQ:CGNX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held Cognex Corporation (NASDAQ:CGNX) at the end of the first quarter, which was 37 in the previous quarter. Cognex Corporation (NASDAQ:CGNX) reported $216 million in revenue, surpassing the guidance midpoint, reflecting a 2% year-on-year growth. While we acknowledge the potential of Cognex Corporation (NASDAQ:CGNX) 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.