Conestoga Capital Advisors, an asset management company, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. At its September meeting, the Federal Reserve lowered the Federal Funds rate by 50 basis points due to weaker employment growth and moderate inflation. Equity markets welcomed the news, raising optimism for a soft landing in the U.S. economy. On September 26th, the S&P 500 Index achieved a record high, the Russell 2000 Index also moved higher over the quarter but remains roughly 10% below its all-time high. The Conestoga Small Cap Composite surged 10.09% (net) in the third quarter outperforming the Russell 2000 Growth Index’s 8.41% return. The Conestoga SMid Cap Composite returned 12.94% (net) versus the Russell 2500 Growth Index’s 6.99% return. The Conestoga Micro Cap Composite advanced 7.60% (net) but trailed the Russell Microcap Growth Index’s return of 8.57%. Finally, the Conestoga Mid Cap Composite returned 8.36% (net) outperforming the Russell Midcap Growth Index’s 6.54%. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2024.

Conestoga Capital Advisors highlighted stocks like Guidewire Software, Inc. (NYSE:GWRE) in its Q3 2024 investor letter. Guidewire Software, Inc. (NYSE:GWRE) offers a platform for property and casualty (P&C) insurance companies. The one-month return of Guidewire Software, Inc. (NYSE:GWRE) was 6.58%, and its shares gained 109.81% of their value over the last 52 weeks. On October 21, 2024, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $189.04 per share with a market capitalization of $15.583 billion.

Conestoga Capital Advisors stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its Q3 2024 investor letter:

"Guidewire Software, Inc. (NYSE:GWRE): This company is a best-in-class provider of core software solutions for property and casualty insurers. GWRE reported another strong quarter, including 37% subscription revenue growth and profits well above consensus estimates. GWRE has continued to realize scale benefits as its business model transitions to cloud software."

An insurance adjuster reviewing images and paperwork to process a claim.

Guidewire Software, Inc. (NYSE:GWRE) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Guidewire Software, Inc. (NYSE:GWRE) at the end of the second quarter which was 34 in the previous quarter. Guidewire Software, Inc.'s (NYSE:GWRE) revenue for the fiscal year 2024 surpassed expectations, reaching $980 million due to robust performance across all revenue segments. While we acknowledge the potential of Guidewire Software, Inc. (NYSE:GWRE) 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 cheapest AI stock.