We added Sterling Infrastructure, a construction and site-preparation company, whose national scale should be increasingly valuable as AI data center campuses require complex excavation and megaproject execution. This positions Sterling Infrastructure well to capitalize on the growing demand for infrastructure that supports AI advancements, making it a compelling addition to our portfolio.

Sterling Infrastructure, Inc. (STRL) was one of the top contributors to the Conestoga Small Cap Composite, advancing +98% during the quarter. However, the letter does not provide a directional argument regarding its future performance or valuation. The mention of STRL is primarily in the context of its contribution to the portfolio's performance relative to the Russell 2000 Growth Index.

Sterling Infrastructure, Inc. was one of the top contributors to the Conestoga Small Cap Composite's performance in the second quarter, advancing +98%. However, the letter does not provide a specific argument or outlook regarding the company's future performance or valuation.

The Fund's allocation to Sterling Infrastructure, Inc. (2.7%), a construction and infrastructure services company, contributed to relative performance over the period.

Sterling Infrastructure has demonstrated strong performance, with a notable increase of 33% this quarter. The company specializes in large-scale site development for data centers and semiconductor fabrication plants, which positions it well to benefit from the ongoing boom in AI-related capital expenditures. The fund's investment in Sterling Infrastructure reflects confidence in its ability to capitalize on the massive investments being made in AI-capable infrastructure, making it a key holding in the portfolio.

Sterling Infrastructure (STRL), as an HVAC vendor to AI server farms, suffered the fallout of the DeepSeek shock. This indicates that the company is facing challenges due to external market pressures, which may impact its future performance. The broader context of the market suggests that while small caps are expected to perform well, Sterling's specific circumstances may hinder its growth potential.