Artisan Mid Cap Fund has disclosed the complete liquidation of its investment in Veeva Systems (VEEV) during the fourth quarter of 2025. This decision, outlined in their recent investor correspondence, stems from growing apprehensions regarding heightened market competition and the escalating influence of artificial intelligence within the sector. Despite Veeva Systems reporting robust recurring revenue, primarily fueled by the adoption of its R&D and commercial cloud platforms, the fund opted to exit its position. This move highlights a strategic shift away from VEEV, seeking to mitigate potential downsides associated with a changing competitive landscape and technological advancements, while emphasizing a focus on identifying more promising, undervalued AI opportunities.
Artisan Partners, an investment management firm, released its fourth-quarter 2025 investor letter for the "Artisan Mid Cap Fund." This letter detailed the fund's investment strategies and performance during the period. The fund aims to invest in businesses that demonstrate strong brand attributes, exhibit consistent earnings growth, and are available at a valuation below their estimated private market worth. The US equity markets concluded a remarkable year with substantial gains in the fourth quarter. During this period, the Fund's Investor Class (ARTMX) posted a return of -0.44%, the Advisor Class (APDMX) returned -0.37%, and the Institutional Class (APHMX) recorded -0.35%. In contrast, the Russell Midcap® Growth Index experienced a more significant decline of -3.70%.
The strong performance of the information technology (IT) and healthcare sectors significantly bolstered the fund's returns throughout the quarter. Within its Q4 2025 investor letter, the Artisan Mid Cap Fund specifically mentioned Veeva Systems Inc. (NYSE:VEEV), a technology firm that offers a cloud-based software platform tailored for the life sciences industry. As of February 20, 2026, Veeva Systems Inc.'s stock was trading at $180.31 per share. Over the preceding month, the stock's return was -19.57%, and it had declined by 20.26% over the previous 52 weeks, bringing its market capitalization to $29.64 billion.
Artisan Mid Cap Fund cited Roblox, Veeva Systems Inc., and Spotify as the primary factors contributing to their portfolio's decline in the fourth quarter. The fund acknowledged Veeva Systems' leadership in providing customer relationship management (CRM) platforms for pharmaceutical sales and marketing organizations. Furthermore, Veeva has successfully expanded its offerings into pharmaceutical research and development through additional software modules. Despite the company's strong performance, evidenced by an 18% increase in recurring revenue driven by the adoption of its R&D and commercial cloud solutions, the fund decided to divest its position. This decision was primarily influenced by increasing competitive pressures and the emerging risks associated with AI advancements in the sector.
Veeva Systems Inc. is currently not included in the ranking of the 30 most frequently held stocks among hedge funds, according to available data. The most recent analysis from the end of the fourth quarter indicated that 74 hedge fund portfolios held positions in Veeva Systems Inc., an increase from 57 in the previous quarter. While recognizing the investment potential of Veeva Systems Inc., the fund believes that certain AI-focused stocks present greater upside opportunities and carry comparatively lower downside risks. For investors seeking highly undervalued AI stocks that could also benefit from potential Trump-era tariffs and the ongoing trend of domestic production, further research into specific recommendations is advised.
The Artisan Mid Cap Fund's decision to exit its investment in Veeva Systems underscores a cautious approach in navigating a rapidly evolving technological landscape. The fund's strategic pivot reflects a proactive stance towards managing risk and seeking out more opportune growth avenues, particularly within the burgeoning AI sector. This re-evaluation of holdings emphasizes the dynamic nature of investment strategies, continually adapting to market shifts and emerging competitive threats while striving for optimal portfolio performance.