| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 12.6% | 6.5% | 27.5% |
Baron Global Opportunity Fund delivered strong performance in Q4 2025, gaining 6.5% versus 3.3% for the MSCI ACWI Index, capping an excellent year with 27.5% returns versus 22.3% for the benchmark. The year was marked by significant volatility around trade policy and tariffs, but markets ultimately benefited from Federal Reserve rate cuts and the AI investment cycle. SpaceX was the largest contributor to performance following a significant revaluation, while strong stock selection in Health Care and Industrials drove outperformance. The fund maintains concentrated exposure to AI beneficiaries across multiple categories, from infrastructure builders like NVIDIA and TSMC to early adopters like e-commerce platforms and cybersecurity companies. International markets outperformed after years of underperformance, though the fund's India overweight proved challenging. The manager emphasizes the importance of investing in companies with both adaptability to AI disruption and the balance necessary to maintain their competitive advantages. With AI innovation accelerating at unprecedented pace and agentic AI becoming reality, the fund remains positioned for long-term growth while maintaining discipline in capital allocation.
Invest in adaptable, innovative companies positioned to benefit from AI disruption across multiple categories including infrastructure builders, service providers, early adopters, and productivity beneficiaries.
The manager expresses excitement about AI developments and opportunities ahead, emphasizing the unprecedented pace of innovation. Despite ongoing uncertainties in global markets, they remain optimistic about long-term prospects of portfolio companies and continue searching for new investment opportunities while maintaining patience and discipline in capital allocation.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Mar 2 2026 | 2025 Q4 | ADYEN, AMZN, ARGX, ASML, BILL, CPNG, CRWD, DDOG, GDS, ILMN, MELI, NET, NU, NVDA, SHOP, SNOW, SQ, TSM, WIX, ZS | AI, Cloud, E-Commerce, global, growth, innovation, semiconductors, technology | - | AI represents the dominant investment theme with companies adapting to disruptive change. The pace of innovation is unprecedented with LLMs becoming more intelligent, costs declining 10x per year, and agentic AI task duration doubling every 6-7 months. Portfolio companies are categorized as AI infrastructure builders, providers, early adopters, and beneficiaries of productivity gains. E-commerce platforms benefit from AI adoption in recommendation engines, advertising algorithms, and customer support optimization. Companies like Amazon, MercadoLibre, Coupang, and Shopify are leveraging AI to improve conversion rates and reduce service costs while expanding into new markets and verticals. Semiconductor companies, particularly TSMC and NVIDIA, are benefiting from AI demand with TSMC raising revenue guidance to mid-30s% growth. NVIDIA continues evolving from graphics cards to leading AI infrastructure company, while TSMC maintains 90% market share in leading-edge manufacturing with ability to raise prices. Cybersecurity companies are using AI in core algorithms to better identify anomalies and block malicious traffic. CrowdStrike is seeing reacceleration in growth with new Falcon Flex offering, while Netskope continues gaining SASE market share with strong competitive win rates. Biotechnology investments focus on companies with differentiated technologies and expanding addressable markets. Argenx continues strong performance with Vyvgart sales exceeding expectations, while BillionToOne disrupts prenatal and oncology diagnostics with innovative QCT technology achieving superior accuracy. Cloud infrastructure companies are positioned to benefit from AI buildout with AWS aggressively investing in capacity and offering full-stack AI solutions. The data gravity of existing customers provides competitive advantages while companies expand AI inference and development platforms. |
| Oct 2 2025 | 2025 Q3 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
BiotechnologyHealthcare industry positioned for catch-up growth after several years of below-trend performance. Government spending expected to increase relative to feared cuts, with companies signaling improvement in revenue growth. Focus on 'picks & shovels' businesses serving the industry. |
Life Science Tools Pharmaceuticals CRO & CDMO Healthcare Research | |
CloudAmazon's positioning to benefit from both infrastructure and application layers of AI is highlighted. The company's logistical prowess represents one of the foremost moats in business and will be enhanced with AI through better orchestration of logistics assets and buildout of more sophisticated robotics. |
Infrastructure Logistics Automation Efficiency Coordination | |
CybersecurityCybersecurity companies are using AI in core algorithms to better identify anomalies and block malicious traffic. CrowdStrike is seeing reacceleration in growth with new Falcon Flex offering, while Netskope continues gaining SASE market share with strong competitive win rates. |
Security AI Detection Enterprise Cloud Protection | |
E-commerceSeveral investments in e-commerce leaders across Asia and Latin America, including MercadoLibre, Sea Limited and Alibaba, faced a more competitive operating environment during the period. As long-term investors, SGA observes that competitive intensity in these markets tends to ebb and flow over shorter time horizons, with market leaders typically emerging from such periods with strengthened strategic positions given inherent network effects. |
Marketplaces Competition Network Effects Asia Latin America | |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| ARGX | Shares of argenx SE contributed to performance, rising 14.0% during the fourth quarter and finishing 2025 up 37.8%. Argenx is a leading biotechnology company best known for developing Vyvgart, the leading FcRn inhibitor for the treatment of autoimmune conditions. Sales of Vyvgart continue to progress well in Generalized Myasthenia Gravis (Generalized MG) while the Chronic Inflammatory Demyelinating Polyneuropathy (CIDP) launch is also off to a strong start. |
| ASML | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| BILL | We rebalanced this allocation by exiting positions in billing digitalization (AVDX and BILL). |
| CPNG | Shares of Coupang, Inc., Korea's largest e-commerce platform, declined 26.7% in the fourth quarter (though up 7.3% in 2025). The weakness was initially driven by elevated upfront investments in its new market, Taiwan, where aggressive customer acquisition, supplier onboarding and product procurement, and logistics infrastructure buildout weighed on near-term profitability. |
| CRWD | CrowdStrike Holdings, Inc. - A year and a half since the famous outage that grounded planes and impacted a broad array of the company's customers, we can conclude that management has done an excellent job in the aftermath of the outage. The company is now seeing a reacceleration in net new annualized recurring revenues (ARR), which accelerated to 73% growth year-on-year in the third quarter. |
| ILMN | Illumina, with almost 70% market share in gene sequencing, has weathered a storm of life science funding cuts and competitive entries. While the coast is not completely clear, they remain well positioned to benefit from any acceleration in both clinical and research spending in the life-sciences. |
| MELI | E-commerce Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| NET | Jennison also entered a new position in Cloudflare. Its network infrastructure delivers key applications over the internet in a cost-effective manner, with optimal security and best-in-class speed. They could be a big beneficiary of the move to agentic AI applications. |
| NU | Since our mid-year update, Nubank's shares increased 37%, bringing full-year performance to +63%. This performance has been driven primarily by fundamentals, with earnings growing approximately 42% over the same period. Brazil remains a powerful profit engine, with high customer engagement, improving risk-adjusted returns, and expanding penetration across consumer and SME banking. Mexico continues to emerge as the next major growth vector: customer penetration has reached ~14% of the population. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| SHOP | Shopify Inc. is a cloud-based software provider for multi-channel commerce. Shares rose 8.3% in the fourth quarter, finishing 2025 up 51.1% on strong financial results that outperformed Street expectations. The company is demonstrating rapid growth at scale with gross merchandise value (GMV) and revenues each growing over 30% year-on-year. |
| SNOW | Snowflake is a popular cloud-based platform that provides comprehensive data warehousing services, mainly for large businesses. By being cloud native, Snowflake helps companies more easily store, analyze and share their data across an entire organization, which has become a crucial ingredient for companies prioritizing IT infrastructure upgrades that can incorporate more AI functionality. A recently expanded partnership with Anthropic highlights how the company is quickly deepening its AI capabilities. Competition is fierce, but Snowflake has become the leading player in cloud data storage, especially for those companies looking for an agnostic solution that can support the multiple hyperscalers that many companies employ. Snowflake's unique and dominant position in the data warehousing market, in what should be a high-growth profitable and sticky business over time, makes the company an attractive investment. |
| SQ | Block operates the Square platform that facilitates merchant payments and the Cash App platform that allows individuals to send and receive money. We exited Block due to our concerns around management's execution. |
| TSM | TSMC was a top contributor during the quarter, driven by robust demand for advanced semiconductor manufacturing and improved gross margins as AI continues to grow strong and the non-AI segment showed signs of recovery. Management raised its revenue growth guidance to the mid-30% range, and given continued strength in demand, AI-related growth targets are expected to move above the current mid-40% level. |
| WIX | Wix.com Ltd. is a leading provider of cloud-based web-development platform for micro-businesses. Shares of Wix declined 41.5% during the fourth quarter and ended the year down 51.9% due to a quarterly earnings report that emphasized greater-than-expected investment behind their new acquisition, the vibe-coding startup, Base44. |
| ZS | Zscaler was among the top 5 largest detractors with significant price declines. We wrote a new investment memo on Zscaler during the quarter. |
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