| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 18.02% | 16.61% | 10.4% |
Baron Partners Fund gained 16.61% in Q2 2026, exceeding the Russell Midcap Growth Index's 14.55% return, driven primarily by SpaceX which appreciated 62.23% after completing the largest IPO in history and announcing landmark AI compute hosting deals. The Fund's Disruptive Growth holdings returned 34.50% while several Core Growth, Financials, and Real/Irreplaceable Assets holdings faced pressure from perceived AI disruption concerns and near-term earnings headwinds from growth reinvestment. Companies including Guidewire, Gartner, Morningstar, FactSet, and CoStar experienced significant valuation multiple compression despite strong fundamentals, with the managers viewing this as temporary and retaining conviction. Tesla continues to advance its autonomy flywheel and is investing over $20 billion in 2026 to solidify vertical integration advantages. The Fund's concentrated but categorically diversified structure with 28 investments and 74.1% in the top 10 positions allowed it to weather sector-specific headwinds. Since converting to a mutual fund in 2003, the Fund has returned 18.02% annualized, exceeding the Index by 6.24% per year through strong performance in both robust economic periods and challenging market environments.
Baron Partners Fund seeks to invest in well-managed growth businesses with sustainable competitive advantages that can double in value within five to six years, maintaining a concentrated portfolio of no more than 30 securities diversified by category but with significant exposure in the top 10 positions.
The managers remain highly confident in the Fund's long-term positioning despite near-term volatility in some holdings. They believe the market has overreacted to AI disruption concerns for information services and software companies, and that these businesses will prove to be accelerated rather than disrupted by AI. The significant capital investments being made by Tesla and others are viewed as critical to building durable competitive advantages. Early Q3 performance shows a rotation beginning, with Guidewire up 23.5%, Morningstar up 23.8%, and Gartner up 16.4% in July. The managers expect the Fund to continue benefiting from its concentrated but categorically diversified structure, with strong absolute and relative performance over full market cycles.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 13 2026 | 2026 Q2 | CSGP, FDS, GWRE, H, IT, MORN, RRR, TSLA | AI, Concentration, Electric Vehicles, Enterprise Software, growth, Hotels, Market Data, Space | - | Baron Partners Fund returned 16.61% in Q2 2026, outpacing its benchmark on the strength of SpaceX, which surged 62% after its record IPO and major AI deals. Several software and information services holdings declined on AI disruption fears despite strong fundamentals, creating what managers view as attractive valuations. The Fund's concentrated portfolio with 74% in top 10 positions delivered exceptional long-term results of 18% annualized since 2003. |
| May 7 2026 | 2026 Q1 | ACGL, CHH, CSGP, FDS, IT, TSLA | AI, Concentration, Electric Vehicles, growth, real estate, Space, technology | - | Baron Partners declined 5.33% but outperformed benchmarks as SpaceX merger with xAI drove gains while AI disruption fears pressured other holdings. Tesla faced capex concerns despite strong fundamentals. Managers maintain conviction in concentrated portfolio, expecting current depressed valuations from temporary headwinds to drive future outperformance once investment cycles complete and AI sentiment improves. |
| Feb 8 2026 | 2025 Q4 | ACGL, BIRK, CHH, CSGP, FDS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, LLY, MSCI, MTN, RRR, SCHW, SPOT, TSLA | AI, Concentration, Disruptive Growth, Electric Vehicles, growth, mid cap, Space, technology |
H CSGP SPOT GWRE IT FDS SCHW IDXX RRR |
Baron Partners Fund returned 19.07% in Q4 2025, driven by concentrated positions in disruptive growth companies including SpaceX and X.AI Holdings which more than doubled. Despite some holdings facing AI disruption concerns and reinvestment headwinds, managers express increasing confidence in depressed investments contributing to future performance as earnings materialize and sentiment improves. |
| Nov 8 2025 | 2025 Q3 | ACGL, BIRK, CHH, CSGP, FDS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, LLY, MSCI, MTN, SCHW, SPOT, TSLA | Concentration, growth, Leverage, mid cap, technology, Tesla | ANET | Baron Partners Fund gained 13.17% in Q3, driven by Tesla's 40% surge on robotaxi progress and automotive strength. Despite year-to-date underperformance from political uncertainty, the concentrated growth strategy maintains long-term outperformance with 17.24% annualized returns since conversion. Managers reduced Tesla weighting while staying bullish on disruptive growth benefiting from deregulation. |
| Aug 18 2025 | 2025 Q2 | ACGL, BIRK, CSGP, FDS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, MSCI, MTN, RRR, SCHW, SPOT, TSLA | Concentration, growth, Leverage, mid cap, technology | - | Baron Partners Fund gained 12.14% in Q2 2025, driven by Tesla's robotaxi progress and broad-based strength across growth holdings. Despite political volatility affecting year-to-date performance, the concentrated portfolio of quality growth businesses continues delivering strong long-term results with 16.80% annualized returns since conversion, significantly outpacing benchmarks through multiple market cycles. |
| Mar 31 2025 | 2025 Q1 | ACGL, CSGP, FDS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, MSCI, MTN, RRR, SCHW, SPOT, TSLA | Concentration, growth, Leverage, mid cap, technology, volatility | - | Baron Partners Fund fell 17.37% in Q1 2025 as post-election policy realities created headwinds for Tesla and travel holdings. Despite near-term volatility from tariff concerns and federal spending cuts, the manager maintains conviction in concentrated growth portfolio, believing reduced regulatory burdens will ultimately benefit market-leading businesses. Fund leverages 15.2% with 88.1% in top 10 positions. |
| Dec 31 2024 | 2024 Q4 | ACGL, BIRK, CSGP, FDS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, MSCI, MTN, RRR, SCHW, SPOT, TSLA | Concentration, growth, Leverage, mid cap, SpaceX, technology, Tesla | - | Baron Partners Fund gained 27.05% in Q4 2024, driven by Tesla and SpaceX appreciation exceeding 50% each. The concentrated growth strategy benefited from improving investor confidence, regulatory tailwinds for technology companies, and stabilizing financial sector fundamentals. Managers expect continued outperformance as markets shift from macro-driven to fundamentals-based valuations. |
| Sep 30 2024 | 2024 Q3 | ACGL, BIRK, CSGP, FDS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, MSCI, MTN, RRR, SCHW, SPOT, TSLA | Concentration, Electric Vehicles, financials, growth, long-term, mid cap, technology | - | Baron Partners delivered 13.94% in Q3, led by Tesla's 32% gain and strong financial sector performance. The concentrated growth fund expects improving macro conditions to benefit its quality holdings as company fundamentals regain importance over macro concerns. Long-term track record remains strong despite recent three-year underperformance. |
| Jul 27 2024 | 2024 Q2 | ACGL, BIRK, CSGP, FDS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, MSCI, MTN, RRR, SCHW, SPOT, TSLA | Concentration, growth, Leverage, Long Term, mid cap, technology, Tesla |
TSLA SPACEX CSGP |
Baron Partners Fund outperformed in Q2 2024 with Tesla and SpaceX driving gains while real estate holdings faced pressure. The concentrated portfolio of 21 growth companies maintains its long-term strategy despite recent underperformance. Portfolio sales growth of 28.6% versus Index's 19.3% suggests strong fundamentals, with management expecting improved performance as investments mature and sentiment shifts. |
| Apr 15 2024 | 2024 Q1 | ACGL, BIRK, CSGP, FDS, FIGS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, MSCI, MTN, RRR, SCHW, SPOT, TSLA | Concentration, growth, insurance, Leverage, mid cap, technology, Tesla | TSLA | Baron Partners Fund fell 9.01% in Q1 2024, primarily due to Tesla's 29.3% decline which detracted 13.41% from performance. Despite this concentrated portfolio risk materializing, management maintains long-term conviction in Tesla and the Fund's strategy of owning competitively advantaged growth businesses. Strong long-term track record continues with 25.16% five-year annualized returns versus 11.82% for the benchmark. |
| Feb 20 2024 | 2023 Q4 | ACGL, BIRK, CSGP, FDS, FIGS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, MRNA, MSCI, MTN, NVDA, RRR, SCHW, SPOT, TSLA, VAC | diversification, growth, Leverage, technology, Tesla, volatility | - | Baron Partners Fund delivered 43.47% returns in 2023 through concentrated growth investing, with Tesla (38.1% position) and SpaceX driving performance despite automotive headwinds. The Fund's diversified approach across Disruptive Growth, Core Growth, Financials, and Real Assets, combined with AI beneficiaries like Gartner and secular growth stories like IDEXX, positions it well for continued long-term outperformance. |
| Sep 30 2023 | 2023 Q3 | ACGL, CSGP, FDS, FIGS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, MRNA, MSCI, MTN, NVDA, RRR, SCHW, SPOT, TSLA, VAC | diversification, financials, growth, Leverage, mid cap, technology, Tesla | - | Baron Partners Fund's Q3 decline reflects macro pressure on growth stocks despite strong YTD performance of 32%. Tesla dominates at 41% allocation while financial services holdings outperformed. Fund maintains diversified approach across growth business types with 24 concentrated positions. Managers expect fundamental valuation to return as rate uncertainty subsides, positioning for long-term outperformance. |
| Dec 31 2022 | 2022 Q4 | ACGL, CSGP, FIGS, IDXX, SCHW, SPOT, TSLA, VLD, XFCH | - | - | |
| Sep 30 2022 | 2022 Q3 | ACGL, CSGP, DEI, FIGS, GWRE, H, IRDM, SCHW, TSLA | - | - | |
| Jun 30 2022 | 2022 Q2 | GLPI, H, IDXX, SCHW, SPOT, TSLA | - | - | |
| Mar 31 2022 | 2022 Q1 | ACGL, CSGP, IDXX, IRDM, MTN, SCHW, SHOP, SPOT, TSLA | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
SpaceSpaceX is the Fund's largest holding at 32.9% of total investments. The company appreciated 62.23% in the quarter after completing the largest IPO in history, raising over $85 billion. SpaceX announced landmark compute hosting deals totaling tens of billions annually with Anthropic and Google, and acquired Cursor, an AI-powered coding platform. The company continues advancing Starship, the world's most powerful rocket, toward full reusability, which would dramatically reduce space access costs and enable orbital compute infrastructure for AI systems. |
SpaceX Starlink Starship Satellites Reusability |
Electric VehiclesTesla is the Fund's second-largest holding at 14.1% of investments. The company beat quarterly expectations with strong fundamentals across automotive, energy storage, and autonomy. Full Self-Driving penetration is deepening, Cybercab production is scaling, and the company finalized design of its AI5 inference chip for the Optimus humanoid program. Tesla is investing over $20 billion in 2026 on new products, vehicles, batteries, and compute to solidify its vertical integration advantages, though this pressures near-term free cash flow. |
Tesla Autonomy FSD Cybercab Optimus | |
AIAI is discussed extensively as both an opportunity and a source of market concern. SpaceX is positioning for AI compute infrastructure in space and acquired AI coding platform Cursor. Tesla is advancing AI for autonomy and humanoid robots. However, several holdings including CoStar, Gartner, Morningstar, FactSet, and Guidewire declined due to investor fears of AI disruption, despite the managers believing AI will enhance rather than disrupt these businesses. The market has adopted a 'shoot first and ask questions later' approach to AI disruption concerns. |
AI Disruption Compute Automation Infrastructure | |
HotelsHyatt Hotels is a top contributor, appreciating 34.80% in the quarter as revenue per available room accelerated and franchisee interest in its brands increased. The company is generating strong earnings and cash flow growth while maintaining a robust balance sheet. Hyatt is repurchasing shares and trades at a significant valuation discount to peers despite having a similar mix of fee-based business. |
Hyatt RevPAR Franchising Lodging Travel | |
Enterprise SoftwareSeveral enterprise software holdings faced pressure from perceived AI disruption and near-term earnings headwinds from growth reinvestment. Guidewire declined 17.78% despite completing its cloud migration and signing a landmark 10-year deal with Liberty Mutual. Gartner fell 18.31% on modest contract value slowdown attributed to temporary public sector headwinds and tariff-related caution. The managers believe these companies possess hard-to-replicate data assets and that AI will be an accelerator rather than a disruptor. |
Guidewire Gartner SaaS Cloud Migration Insurance Software | |
Market DataInformation services companies including Morningstar, FactSet, and CoStar experienced significant multiple compression driven by investor concerns about AI disruption. Morningstar declined 9.79% and now trades at a 63% discount to its trailing three-year average multiple despite posting 8% organic revenue growth and 18% adjusted EBIT growth. FactSet trades at a 52% discount to its 10-year average multiple. The managers view these as collections of high-quality, hard-to-replicate data businesses where AI requires trusted, structured data to be useful. |
Morningstar FactSet CoStar Financial Data Real Estate Data | |
Energy StorageTesla's energy storage business continues to experience robust demand driven by rapid growth in electricity consumption tied to AI data centers and their volatile power requirements. The company is planning to ramp an additional 50 GWh per year of energy storage capacity, materially above its current approximately 66 GWh per year capacity. This segment continues to produce high 20s percent gross margins on a normalized basis. |
Energy Storage Batteries Data Centers Grid Tesla | |
CasinosRed Rock Resorts appreciated 22.39% in the quarter, contributing 0.41% to the Fund's return. The company is part of the Real/Irreplaceable Assets category which returned 8.70% overall in the quarter. |
Red Rock Gaming Las Vegas Regional Gaming | |
| 2026 Q1 |
AIManager discusses AI disruption concerns affecting portfolio companies across sectors. Notes that customers are temporarily refraining from large deals until they understand AI impact, leading to lower valuations. However, sees AI as potentially beneficial for companies like FactSet and Gartner with proprietary data. |
Disruption Valuation Data Software Impact |
SpaceSpaceX is the fund's largest holding at 33% of portfolio, valued at $3.89 billion with cost basis of only $292 million. Company announced merger with xAI, creating combined $1.25 trillion valuation. SpaceX continues expanding Starlink broadband service and making progress on Starship rocket development. |
SpaceX Starlink Satellites Rockets Broadband | |
Electric VehiclesTesla facing pressure from increased capex spending of over $20 billion in 2026 on new products and manufacturing. Demand challenged by reduced tax incentives. However, manager believes capex will solidify vertical integration advantages and autonomous driving progress will transform company into profitable software business. |
Tesla Capex Autonomous Manufacturing Software | |
Commercial Real EstateCoStar facing pressure from AI fears and significant investment in residential product with modest sales performance. Manager believes core non-residential business value exceeds current share price, suggesting residential opportunity has little ascribed value by investors. |
CoStar Residential Information Marketing Valuation | |
| 2025 Q4 |
AIManager sees AI as driving significant growth across portfolio companies, with Google Cloud growing 30%+ supported by AI training and inference services. Applied Materials benefits from AI-related capacity spending in advanced logic and high-bandwidth memory. Apple's on-device AI features exceeded expectations with strong adoption rates. |
Artificial Intelligence Cloud Computing Semiconductors Infrastructure |
CloudCloud infrastructure remains a key growth driver with Google Cloud delivering strong performance and Microsoft Azure maintaining leadership position despite some deceleration. Manager views cloud as foundational to long-term technology growth with strong remaining performance obligations providing multi-year revenue visibility. |
Cloud Infrastructure SaaS Enterprise Software | |
PharmaceuticalsEli Lilly emerged as a top performer driven by GLP-1 franchises Mounjaro and Zepbound, with sales more than doubling year-over-year. Manager views Lilly as one of the highest-quality growth franchises in global healthcare with leadership in diabetes, obesity, and neuroscience providing durable competitive advantages. |
GLP-1 Diabetes Obesity Biotechnology | |
SemiconductorsSemiconductor equipment sector showed strength with Applied Materials benefiting from improving wafer-fab spending visibility and AI-related capacity investments. Manager believes AMAT is well-positioned in the semiconductor capital equipment ecosystem with structural increases in semiconductor intensity and AI infrastructure build-out. |
Semiconductor Equipment AI Infrastructure Memory | |
StreamingNetflix faced headwinds from subscriber growth concerns and rising content spending, with management guiding to slower net additions after price increases. Despite near-term challenges including Warner Bros. Discovery acquisition uncertainty, manager maintains conviction in Netflix as the dominant global streaming platform with durable competitive advantages. |
Content Subscription Entertainment | |
| 2025 Q3 |
Electric VehiclesTesla remains the fund's largest position with strong quarterly performance driven by renewed automotive demand, improved manufacturing efficiencies, and expansion into robotaxi services. The company is transitioning from hardware sales to high-margin recurring software revenue through Full Self-Driving capabilities. |
Tesla Robotaxi Autonomous Manufacturing Software |
SpaceSpaceX continues generating significant value through rapid expansion of Starlink broadband service and establishing itself as a leading launch provider with reusable technology. The company is making tremendous progress on Starship, the largest and most powerful rocket ever flown. |
SpaceX Starlink Launch Satellites Starship | |
AIThe fund sees AI as both opportunity and threat across portfolio companies. While some holdings like Gartner and FactSet face investor concerns about AI displacement, the managers believe these companies' proprietary data will enhance rather than threaten their AI capabilities. |
Artificial Intelligence Data Disruption Software Analytics | |
Pet CareIDEXX Laboratories delivered strong results despite pressure on veterinary clinic foot traffic. New cancer diagnostic instruments are gaining adoption and providing cross-selling opportunities, with another instrument launch expected to drive future growth. |
Veterinary Diagnostics Healthcare Instruments Cancer | |
| 2025 Q2 |
Electric VehiclesTesla remains the Fund's largest position at 30.5% after meaningful rebound. The company completed limited commercial rollout of robotaxi business in Austin, introduced refreshed Model Y globally with design and performance upgrades, and is progressing toward scaling humanoid robot production. |
Tesla Robotaxi Model Y Autonomous Manufacturing |
StreamingSpotify's subscription platform is well insulated from tariff threats and is meaningfully growing users, revenue, and margins. Newly built products are proving their importance to artists and enabling better terms with music labels. |
Spotify Subscription Music Artists Margins | |
Pet CareIDEXX Laboratories maintains strong performance despite macroeconomic challenges affecting veterinary visit growth. New proprietary innovations and field sales force expansion expected to be meaningful contributors to growth in 2025. |
IDEXX Veterinary Diagnostics Innovation Healthcare | |
CasinosRed Rock Resorts has proven that its premium locals Las Vegas casinos can generate impressive returns. The company's newest property, Durango, has had a return on capital in the high teens, giving increased confidence to expand. |
Red Rock Las Vegas Gaming Locals Returns | |
Retail BrokerageCharles Schwab continued to pay down short-term funding, contributing to stronger net interest margin and earnings growth. Net new asset growth improved to 5.5%, in line with long-term target range as Ameritrade acquisition attrition declined. |
Schwab Brokerage Assets Margins Integration | |
| 2025 Q1 |
Electric VehiclesTesla faces near-term headwinds from Model Y refresh, political controversy around Elon Musk, and regulatory changes, but the manager remains confident in long-term growth driven by secular EV adoption trends, compelling product line, leading cost structure, and cutting-edge technology including robotaxi service and humanoid programs. |
Tesla EV Autonomous Robotaxi Manufacturing |
TravelTravel-oriented leisure properties declined due to cautious consumer behavior and macro concerns. Airlines indicate consumers are limiting travel and becoming increasingly price sensitive, while construction and labor disputes have impacted specific properties, though the manager believes this cyclicality will pass. |
Hotels Airlines Leisure Consumer Cyclical | |
AIX.AI Holdings developed AI model Grok 3 which demonstrated top evaluation scores ahead of industry-leading models, opened the Colossus data center with over 100,000 GPUs, and acquired X (formerly Twitter) to access vast real-time multimodal data from 600 million users worldwide. |
Artificial Intelligence Data Centers Machine Learning Computing Social Media | |
Commercial Real EstateCoStar Group showed signs of commercial real estate market recovery with increased sales force productivity, while the company continues building out residential opportunity through Homes.com with dedicated sales teams and expects growth acceleration in non-residential business. |
Real Estate Information Services Sales Residential Commercial | |
| 2024 Q4 |
Electric VehiclesTesla appreciated more than 50% in the quarter driven by upcoming product launches, improvements in autonomous driving software, and expectations of regulatory approval under the new administration. The energy business continued to grow with higher margins, and new mass market vehicles are expected to launch in 2025. |
Tesla Autonomous Energy Software Vehicles |
SpaceSpaceX generated significant value through rapid expansion of Starlink broadband service with substantial growth in active users. The company established itself as a leading launch provider with reusable technology and is making progress on Starship, the largest rocket ever flown. |
SpaceX Starlink Satellites Launch Starship | |
Capital MarketsCharles Schwab benefited from stabilizing client cash levels after a two-year drawdown, allowing continued paydown of short-term borrowings. The company participated in the broader financial sector rally following Republican election results and expectations of more business-friendly regulation. |
Schwab Brokerage Interest Cash Financial | |
TravelVail Resorts showed resurgence in pass sales and continued ability to increase prices at resorts. The company focused on cost management which should lead to margin expansion. Hyatt Hotels also contributed positively to performance during the quarter. |
Vail Resorts Pricing Margins Hotels | |
| 2024 Q3 |
Electric VehiclesTesla appreciated 32% in the quarter as investors focused on the company's potential rather than near-term macro impacts. The company has improved vehicle deliveries, particularly in China, and is expected to launch new models next year. Tesla has also made significant advances in autonomous driving, robotics, and energy storage products. |
Tesla Autonomous Energy Storage Vehicle Models China |
FinancialsThe Fund had significant gains among financial businesses including MSCI, Arch Capital, and FactSet. MSCI saw pent-up demand for new products leading to increased contracts and lower cancellations. Arch Capital reported strong underwriting profitability with 20% operating return on equity. |
MSCI Arch Capital FactSet Underwriting Contracts | |
CloudGuidewire Software advanced after subscription gross margins improved by more than 1,000 basis points. The company's cloud transition is substantially complete, with annual recurring revenue benefiting from new customer wins and migration to InsuranceSuite Cloud. |
Guidewire Cloud Transition Subscription ARR Insurance | |
| 2024 Q2 |
Electric VehiclesTesla demonstrated better-than-expected margins despite operational complexities and manufacturing shutdowns. The company continued to drive manufacturing costs lower, accelerate new model launches, and invest heavily in AI initiatives. Tesla expects to launch a lower cost model as soon as late 2024, which should result in accelerated revenue growth and increased factory utilization. |
Tesla Manufacturing Margins AI Autonomous |
SpaceSpaceX is generating significant value with rapid expansion of its Starlink broadband service, successfully deploying satellites in low Earth orbit and reporting substantial growth in active users. The company has established itself as a leading launch provider with highly reliable and cost-effective launches using reusable technology, while making tremendous progress on its newest rocket, Starship. |
SpaceX Starlink Satellites Launches Starship | |
Commercial Real EstateReal estate-related businesses faced challenges from higher interest rates and cautionary consumers impacting property valuations and hotel visitations. CoStar Group experienced weakness along with the broader software sector, with most software companies experiencing a slowdown in new sales activity leading to guidance reductions and multiple compression. |
CoStar Property Valuations Software Sales | |
| 2024 Q1 |
Electric VehiclesTesla remains the fund's largest position despite Q1 underperformance. Management believes investor concerns about Chinese competition and pricing pressure are overblown, citing Tesla's superior technology and manufacturing expertise. The fund maintains conviction in Tesla's mission to accelerate sustainable energy transition. |
Tesla EV Autonomous Manufacturing Competition |
TravelHyatt Hotels contributed positively as it continues transitioning to an asset-light business model with 85% of revenue from management and franchise fees. Strong revenue per available room growth and expansion of developer pipelines position the company for robust free cash flow generation. |
Hotels Asset-light Franchise Revenue Cash Flow | |
Capital MarketsArch Capital Group benefited from favorable pricing trends in P&C insurance markets and elevated interest rates driving higher investment income. The company reported 24% operating ROE and 44% book value per share growth with excellent underwriting profitability. |
Insurance Underwriting ROE Pricing Interest Rates | |
| 2023 Q4 |
Electric VehiclesTesla remains the largest position at 38.1% of assets despite near-term automotive pressures from macroeconomic headwinds and price reductions. The company delivered its highly anticipated Cybertruck and refreshed Model 3 while continuing robust product development. Management anticipates introducing a new lower-priced vehicle next year to address a much larger market segment. |
Tesla Cybertruck Automotive Manufacturing Innovation |
SpaceSpaceX achieved record-breaking performance with 96 Falcon rocket launches in 2023, nearly twice weekly on average. Starlink operates over 5,500 satellites and serves 2.3 million active customers, more than doubling its customer base during the year. Starship successfully performed its second test flight, expected to reduce costs and expand operational capabilities including Mars colonization goals. |
SpaceX Satellites Launches Starlink Mars | |
AIGartner is positioned to emerge as a critical decision support resource for companies evaluating AI opportunities and risks. This development is expected to provide tailwinds to Gartner's volume growth and pricing realization. Tesla is also expected to benefit from AI investments through autonomous driving technology, Dojo training computer, and Autobidder energy trading platform. |
Artificial Intelligence Gartner Decision Support Autonomous Driving Technology | |
Pet CareIDEXX Laboratories continues delivering robust financial results despite subdued veterinary clinic foot traffic. The company's competitive strengths are outstanding with new proprietary innovations and field sales force expansion expected to contribute meaningfully to 2024 growth. Long-term secular trends around pet ownership and pet care spending have been structurally accelerated. |
Veterinary Diagnostics Pet Ownership Healthcare Innovation | |
| 2023 Q3 |
Electric VehiclesTesla remains the Fund's largest holding at 41% despite quarterly decline due to macroeconomic pressures and price reductions. The manager expects Tesla to benefit from Cybertruck deliveries, next platform development, and AI investments in Dojo supercomputer for full self-driving capabilities. |
Tesla Cybertruck Automotive AI Dojo |
Capital MarketsFinancial services holdings including FactSet, MSCI, and Guidewire performed well despite macro volatility. These companies serve highly regulated, competitively advantaged end-markets that are vital to customers, providing insulation from tough macroeconomic environments. |
FactSet MSCI Guidewire Financial Software Data | |
Commercial Real EstateCoStar Group faced headwinds from lower non-subscription revenue due to significant drop in commercial real estate sales. However, the manager remains optimistic about volume recovery and sees the residential offering as a transformative opportunity worth substantial investment. |
CoStar Real Estate Data Analytics Residential | |
TravelReal estate and hospitality holdings including Hyatt, Vail Resorts, and Red Rock Resorts declined due to perceived impact on consumer discretionary spending from slowing job market and higher inflation pressures. |
Hyatt Vail Hospitality Consumer Discretionary | |
Satellite BroadbandIridium Communications faced significant stock decline as future growth moderates and direct-to-device opportunity timeline extends longer than anticipated. Despite partnership with Qualcomm for satellite integration, implementation by device manufacturers remains uncertain. |
Iridium Satellite Qualcomm Direct-to-device IoT |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 8, 2026 | Fund Letters | Ronald Baron | H | Hyatt Hotels Corporation | Consumer Discretionary | Hotels, Restaurants & Leisure | Bull | New York Stock Exchange | AssetLight, buybacks, Hotels, Loyalty, RevPAR | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | CSGP | CoStar Group, Inc. | Real Estate | Real Estate Management & Development | Bull | NASDAQ | Marketplaces, Optionality, productivity, Real Estate, Salesforce | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | SPOT | Spotify Technology S.A. | Communication Services | Interactive Media & Services | Bull | New York Stock Exchange | ARPU, Audio, Margins, Streaming, Subscriptions | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | GWRE | Guidewire Software, Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | ARR, cloud, Insurance, Margins, migration | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | IT | Gartner, Inc. | Information Technology | IT Consulting & Other Services | Bull | New York Stock Exchange | AI, buybacks, productivity, research, Subscriptions | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | FDS | FactSet Research Systems Inc. | Financials | Financial Exchanges & Data | Bull | New York Stock Exchange | AI, analytics, buybacks, Data, Margins, monetization, Recurring, Retention, Workflow | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | SCHW | The Charles Schwab Corporation | Financials | Investment Banking & Brokerage | Bull | New York Stock Exchange | Asset flows, Brokerage, Deposits, Funding, guidance, Integration, leverage, NIM, Revisions | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | IDXX | IDEXX Laboratories, Inc. | Health Care | Health Care Supplies | Bull | NASDAQ | compounding, diagnostics, franchise, growth, innovation, Margins, Pricing, Secular, Utilization | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | RRR | Red Rock Resorts, Inc. | Consumer Discretionary | Casinos & Gaming | Bull | NASDAQ | CapEx, development, Durango, EBITDA, Gaming, Locals, Margins, Roi, Visitation | Login |
| Nov 8, 2025 | Fund Letters | Ronald Baron, Michael Baron | ANET | Arista Networks, Inc. | Information Technology | Cloud data center networking | Bull | NYSE | AI infrastructure, buybacks, Cloud networking, Ethernet switches, Free Cash Flow, hyperscalers, Margins, secular growth | Login |
| Jun 30, 2024 | Fund Letters | Baron Partners Fund | TSLA | Tesla, Inc. | Consumer Discretionary | Automobile Manufacturers | Bull | NASDAQ | AI software, autonomous driving, Electric Vehicles, energy storage, growth, manufacturing, robotics, technology | Login |
| Jun 30, 2024 | Fund Letters | Baron Partners Fund | SPACEX | Space Exploration Technologies Corp. | Industrials | Aerospace & Defense | Bull | Private | Aerospace, broadband, Launch Services, Private Company, Reusable Rockets, Satellites, Space Exploration, technology | Login |
| Jun 30, 2024 | Fund Letters | Baron Partners Fund | CSGP | CoStar Group, Inc. | Real Estate | Real Estate Services | Bull | NASDAQ | Brokerage, commercial real estate, Data Analytics, Real Estate, Residential Platform, SaaS, Software, technology | Login |
| Mar 31, 2024 | Fund Letters | Baron Partners Fund | TSLA | Tesla, Inc. | Consumer Discretionary | Automobile Manufacturers | Bull | NASDAQ | Artificial Intelligence, automotive, autonomous vehicles, battery technology, China, Electric Vehicles, energy storage, Full Self-Driving, manufacturing, Software | Login |
| TICKER | COMMENTARY |
|---|---|
| TSLA | Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, and energy storage solutions, while developing advanced real-world AI technologies. Shares rose after the company continued to beat quarterly expectations, with first-quarter results delivering substantial outperformance across most key metrics. Beneath the headline numbers, Tesla's autonomy flywheel continued to build: Full Self-Driving (FSD) penetration is deepening, the active subscriber base is growing, and regulatory approvals in an increasing number of countries are validating the technology and broadening the addressable market. Production of the Cybercab, Tesla's first purpose-built robotaxi platform, is scaling and should drive meaningful cost reductions as the service expands. Tesla also finalized the design of AI5, its next-generation inference chip, a development with particular relevance to the Optimus humanoid program. Rising capital expenditure reflects Tesla's continued investment in its growth initiatives and reinforces our conviction in the company's long-term positioning as a leading vertically integrated physical AI company. The negative market reaction to Tesla's most recent quarterly report appears driven primarily by short-term expectations, an increase in capital expenditure guidance, and a broader weakening in the AI companies, rather than fundamental deterioration in the business. After capital expenditures of $8.5 billion in 2025, the company announced it could spend more than $20 billion in 2026 on new products, vehicles, batteries, and compute. This higher spend could pressure near-term profits and weigh on free cash flow. Short-term investors are cautious. We, however, believe this capital cycle will solidify Tesla's vertical integration cost and functionality advantages. The core automotive franchise remains healthy as order backlogs are at their highest levels since 2023, average selling prices remain stable with some markets seeing pricing move higher, and gross margins remain stable at mid-teens levels. The Model Y continues to rank among the best-selling vehicles of any kind in multiple markets, year after year. Tesla's energy storage business continues to experience robust demand, underpinned by the rapid growth in electricity consumption tied to AI data centers and the volatile power requirements they create. The company is planning to ramp an additional 50 GWh per year of energy storage capacity, materially above its current approximately 66 GWh per year capacity. This segment continues to produce high 20s percent gross margins on a normalized basis. The robotaxi rollout has been slower than some anticipated. However, progress is being made on FSD capability, expanding the Austin robotaxi network, and Optimus humanoid robot development. Each incremental mile of real-world data strengthens Tesla's technology lead. We believe this capex cycle will prove to be a critical investment in the company's long-term competitive position, ultimately transforming Tesla into a highly profitable software and AI business in addition to its already exceptional manufacturing franchise. |
| H | Shares of global hotelier Hyatt Hotels Corporation increased in the second quarter as revenue per available room accelerated and management highlighted rising franchisee interest in its brands. As a result, the company is seeing strong growth in earnings and cash flow. Hyatt continues to have a robust balance sheet and is repurchasing shares, taking advantage of the stock's significant valuation discount to peers despite having a similar mix of fee-based business. We believe Hyatt remains an attractive investment despite recent gains. |
| RRR | Red Rock Resorts appreciated 22.39% in the quarter, contributing 0.41% to the Fund's return. |
| CSGP | CoStar Group, Inc. is the leading provider of information and marketing services to the commercial and residential real estate industries. Shares fell due to multiple compression driven by rising AI fears. The market has increasingly come to view AI as an existential risk for a growing number of industries, including software, business services, information services, and video games. While there is little evidence of any fundamental impact on these sectors, investors have largely adopted a 'shoot first and ask questions later' approach, leading to significant stock price declines. We continue to own CoStar due to its enviable business model, differentiated data assets, and meaningful growth opportunities in providing enhanced real estate information, analytics, and marketplace offerings. The company also maintains a substantial cash balance, which we are hopeful will be used to aggressively repurchase shares at current depressed valuation levels. |
| IT | Gartner, Inc. is a provider of syndicated research and technology insights that serves tens of thousands of enterprise clients worldwide. The shares fell 18.31% after the company reported contract value (CV) growth that came in just 0.5% below expectations, underscoring the dramatic valuation compression at play. We attribute most of the CV slowdown to two temporary headwinds: cost-cutting within the U.S. public sector, which represents roughly 5% of revenue, and more cautious spending by companies exposed to tariffs and uncertain macro conditions. The market has also grown concerned that AI will displace Gartner's insights business. We disagree. Gartner possesses a vast and growing proprietary dataset generated through hundreds of thousands of interactions with buyers, sellers, and consumers of technology that, we believe, AI cannot replicate. Rather, AI should be an accelerator for Gartner, enabling the company to surface insights faster and deliver them in more impactful formats. We expect CV growth to reaccelerate as public sector headwinds abate, and sales force productivity normalizes. Gartner is actively repurchasing shares at what we view as depressed valuations. Like CoStar, shares of Gartner, Inc., a leading provider of syndicated research, detracted from performance due to multiple compression driven by rising AI fears. We continue to own Gartner given its large addressable market, significant competitive advantage, and robust free cash flow generation, which we expect management to deploy toward share repurchases at depressed valuation levels. |
| GWRE | Guidewire Software, Inc. is a leading software vendor for the global property and casualty (P&C) insurance industry. The shares declined 17.78% in the quarter. After spending several years and billions of dollars migrating its on-premise product to the cloud, that transition is now substantially complete. New deal momentum is accelerating, as evidenced by Guidewire's landmark 10-year agreement with Liberty Mutual, the fifth largest U.S. insurer with $45 billion in direct written premiums, to migrate its on-premise to the cloud. We believe this agreement could help catalyze adoption among other Tier 1 carriers. The $2.5 trillion global P&C insurance industry depends on mission-critical software, and Guidewire is uniquely positioned to be its standard bearer. We believe the company can capture 30% to 50% of its $15 billion to $30 billion total addressable market and generate margins above 40%. Shares of P&C insurance software vendor Guidewire Software, Inc. declined after a handful of deals slipped from the fiscal third quarter into the fiscal fourth quarter. We believe this is purely a timing issue, with these deals having since closed in the current period. Guidewire's InsuranceSuite platform serves as the core system of record for insurance carriers, functioning as the single source of truth for the policies an insurer writes, the claims it processes, the premiums it collects, and the payments it makes. We think the core-system opportunity alone represents nearly $20 billion of annual recurring revenue, or roughly 20 times Guidewire's current size. In our view, AI will meaningfully expand this opportunity by enabling automation and intelligence on top of the core system of record. Guidewire is already bringing new AI-enabled capabilities to market and signing customers, and we expect adoption to accelerate over the coming year. Finally, we expect Guidewire to benefit from the same internal productivity enhancements AI is driving across enterprises, which should help it grow faster with lower costs and ultimately improve profitability. |
| MORN | Morningstar, Inc. is a leading provider of independent investment research, data, and analytics serving financial advisors, asset managers, and individual investors globally. The shares declined 9.79% in the quarter amid continued investor concerns that generative AI could disrupt the company's data and research businesses. Those concerns compressed valuation multiples across information services companies and weighed on the stock, even as Morningstar's core franchises continued to post healthy results. Organic revenue grew 8% and adjusted EBIT grew 18% over the last 12 months. We continue to view Morningstar as a collection of high-quality, hard-to-replicate data businesses. AI requires trusted, structured, and auditable data to be useful and Morningstar is a category leader in investment data. Management has meaningfully accelerated share repurchases, buying back $300 million in the most recent quarter and $1.1 billion in total since 2024. The stock now trades at a 63% discount to its trailing three-year average multiple. |
| FDS | FactSet Research Systems Inc. is a leading provider of financial data, analytics, and technology solutions to investment professionals globally. The shares came under pressure as investors continued to discount the business for perceived AI disruption risk. We believe the market significantly understates FactSet's positioning as AI becomes more deeply embedded in financial workflows, and in our view, FactSet is becoming critical AI infrastructure for the industry. FactSet has grown its organic annual subscription value 7% over the past year. CEO Sanoke Viswanathan noted on the most recent earnings call that momentum has continued. AI drove meaningful client expansions, with a top 10 bank doubling its data subscriptions. The company also announced a strategic partnership with Google Cloud to embed Gemini AI models into its workstation. FactSet now trades at a 52% discount to its 10-year average multiple and a 68% discount to its 5-year peak multiple. Management has repurchased $163 million in the most recent quarter. |
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