Conestoga Capital Advisors, an asset management company, recently released its second-quarter 2025 investor letter. The second quarter of the year started off poorly but gained momentum as tariff fears eased and market volatility decreased significantly. Despite the challenging market conditions, Conestoga Micro Cap Composite saw a net-of-fees appreciation of 15.65% in the second quarter. However, it underperformed the Russell Microcap Growth Index, which had a return of 20.92%.
In their investor letter, Conestoga Capital Advisors highlighted one of their key stock picks, Planet Labs PBC (NYSE:PL). Planet Labs is a company that designs, constructs, and launches constellations of satellites that provide high cadence geospatial data. The stock had a one-month return of 9.02% and has seen a 172.54% increase in value over the last 52 weeks. As of July 25, 2025, Planet Labs stock closed at $6.65 per share, with a market capitalization of $2.018 billion.
Conestoga Capital Advisors provided insight into their decision to invest in Planet Labs in their investor letter. They highlighted the company’s leadership in Earth observation data, with daily satellite scans of the entire Earth supported by over 200 satellites. Planet Labs has seen strong demand in both defense and civil markets, driven by geopolitical uncertainty. While the commercial segment has been a bit slower, it is expected to resume growth. The company also reported stronger than expected free cash flow for its fiscal first quarter.
Despite the potential of Planet Labs as an investment, Conestoga Capital Advisors noted that there are other AI stocks with greater upside potential and lower downside risk. They recommended looking into other undervalued AI stocks that could benefit from current market trends.
In conclusion, Conestoga Capital Advisors’ second-quarter investor letter provides valuable insights into their investment strategy and key stock picks for 2025. Planet Labs PBC (NYSE:PL) is just one of the stocks they have highlighted, and investors are encouraged to do their own research before making any investment decisions.
