Overview

• Managers said Q2 opened with volatility and closed with the S&P 500 at record highs, creating mixed outcomes across small-cap holdings.
• Sterling Infrastructure rebounded from a Q1 selloff tied to AI headlines, with booming data-center work, accelerating backlog, and a September 29 close of $341.10 that put its market cap at $10.41 billion.
• Construction Partners’ performance was helped by a large Texas acquisition and other deals that sped up growth, with fiscal Q3 2025 revenue at $779.3 million, up 51% year over year.
• Grid Dynamics sold off after February guidance was viewed as too aggressive and the company did not raise its May outlook, even as Q2 revenue rose 21.7% year over year to $101.1 million.
• Merit Medical’s stock was pressured by tariff and trade-policy concerns given roughly 40% of sales are outside the U.S., though Q2 2025 revenue grew 13% to $382.5 million.