Here’s Why Jacob Funds Established a Position in Cabaletta Bio (CABA)

Soumya Eswaran

Wed, February 18, 2026 at 10:34 PM GMT+9 3 min read

In this article:

CABA

+5.71%

Jacob Funds, a mutual fund company, released its fourth-quarter 2025 investor letter. A copy of the same can be downloaded here. After an optimistic quarter, equity markets corrected slightly in November. Although overall economic growth has been robust throughout the year, recent divergent data on consumer spending and the labor market have put doubt on future projections. This pattern has become somewhat familiar over the past few years, as conflicting economic data has become the norm. As for the Fund’s strategy, the recent moderation in AI tech companies seems beneficial, and the firm believes the new productivity cycle will accelerate profit margins and earnings growth, resulting in weaker labor markets. Small companies could benefit from this trend, resulting in potential expansion in valuation multiples, and in turn, be favorable for its Funds compared to peers. In addition, please check the Funds’ top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Jacob Funds highlighted Cabaletta Bio, Inc. (NASDAQ:CABA). Cabaletta Bio, Inc. (NASDAQ:CABA) is a clinical-stage biotechnology company that focuses on developing therapies for autoimmune diseases. On February 17, 2026, Cabaletta Bio, Inc. (NASDAQ:CABA) stock closed at $2.96 per share. One-month return of Cabaletta Bio, Inc. (NASDAQ:CABA) was 26.50%, and its shares are up 37.67% over the past twelve months. Cabaletta Bio, Inc. (NASDAQ:CABA) has a market capitalization of $284.945 million.

Jacob Funds stated the following regarding Cabaletta Bio, Inc. (NASDAQ:CABA) in its fourth quarter 2025 investor letter:

“The Jacob Discovery Fund added two new positions in the quarter, Cabaletta Bio, Inc. (NASDAQ:CABA) and Prime Medicine. Cabaletta is developing a CAR-T-based immunotherapy platform intended to target a variety of autoimmune diseases, as opposed to the cancers that currently approved CAR-T drugs are successfully treating. Cabaletta hopes that its drugs - which are created by taking a patient’s own blood, treating it with their technology, and then reinfusing the treated blood back into the patient - will cause an immune system reset through a total transient depletion of that patient’s B cells. Early data has shown that this type of therapy is extremely promising for patients suffering from several different autoimmune diseases. Safety and durability are two important factors that will determine the success of these programs, and the next 12 months will involve the release of lots of new data that will hopefully prove the viability of the treatment. Importantly, Cabaletta is working on a promising regimen in its ongoing clinical studies that will not require a patient to undergo an arduous preconditioning process prior to treatment, which should help reduce some of the safety concerns.”

Story Continues  

Cabaletta Bio, Inc. (NASDAQ:CABA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 16 hedge fund portfolios held Cabaletta Bio, Inc. (NASDAQ:CABA) at the end of the third quarter, compared to 20 in the previous quarter. While we acknowledge the potential of Cabaletta Bio, Inc. (NASDAQ:CABA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Cabaletta Bio, Inc. (NASDAQ:CABA) and shared a list of best stocks under $3 to invest in. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.

Terms and Privacy Policy

Privacy Dashboard

More Info