| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.4% | 4.6% | 19.4% |
| 2025 | 2024 |
|---|---|
| 19.4% | 39.9% |
Baron Opportunity Fund delivered strong performance in Q4 2025, gaining 4.63% versus the Russell 3000 Growth Index's 1.14%, driven by stock picking across innovation and secular growth leaders. The Fund's standout contributor was SpaceX, now the second largest holding, benefiting from rapid Starlink broadband expansion and reusable launch technology progress. AI remains the predominant investment theme, with NVIDIA being a 10-bagger and Broadcom a 2.5-bagger from explosive growth. The Fund maintains high conviction positioning across secular megatrends including AI, space technology, cloud computing, and advanced therapeutics. Key additions included Axon Enterprise for public safety technology, On Holding for athletic footwear, and Heartflow for AI-powered heart disease diagnostics. The manager exited Oracle due to OpenAI concentration concerns and The Trade Desk due to Amazon competitive pressures. With continued Federal Reserve easing and moderating economic pressures, the Fund remains focused on durable, innovation-driven growth opportunities that should deliver solid long-term returns.
Baron Opportunity Fund focuses on powerful secular growth trends that disrupt industries and drive sustained, high-impact, profitable growth opportunities, with transformative trends like AI, space exploration, autonomous transportation, robotics, and advanced therapeutics shaping the future and driving long-term investment returns.
The manager remains confident in and committed to the Fund's strategy of durable growth based on powerful, long-term, innovation-driven secular growth trends. He continues to believe that non-cyclical, durable, and resilient growth should be part of investors' portfolios and that the strategy will deliver solid long-term returns for shareholders.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 5 2026 | 2025 Q4 | ACLX, AMZN, ARGX, AXON, BRCM, CSGP, DUOL, EXAS, GOOGL, GTLB, HRTX, LLY, META, MSFT, NVDA, ONON, ORCL, SPOT, TSLA, TTD | AI, Cloud, growth, innovation, secular trends, semiconductors, Space, technology | - | AI is the most powerful technology platform shift since the internet, driving stock leadership and returns over the last three years. Baron has investments across… |
| Nov 8 2025 | 2025 Q3 | ANET, AVGO, HTFL, IT, NVDA, PAR, SNPS, SPOT, TEAM, TSLA, TTD | AI, Cloud, compute, innovation, semiconductors |
NEE FFBC NVDA TSLA AVGO TTD IT PAR |
The fund notes unprecedented AI-driven capital spending, including multigigawatt compute commitments and expanding TAM projections across software, semiconductors, and cloud. Managers evaluate AI through multiple… |
| Aug 5 2025 | 2025 Q2 | - | AI, Long-Term Growth, secular trends, US Equities | - | - |
| Mar 31 2025 | 2025 Q1 | AVGO, MPWR, NARI, NVDA, SNOW, SPOT, TSLA, TSM, TTD | - | - | - |
| Dec 31 2024 | 2024 Q4 | ANET, CYBR, LPLA, MSFT, NARI, NVDA, TSLA, VKTX | - | - | - |
| Sep 30 2024 | 2024 Q3 | AVGO, CRWD, DUOL, GDS, GWRE, INDI, MBLY, META, MSFT, NVDA, PAR, TEAM, TSLA | - | - | - |
| Jun 30 2024 | 2024 Q2 | AAPL, AMZN, AVGO, CSGP, EXAS, GWRE, IOT, MSFT, NVDA, TSM, VKTX, WDAY | - | - | - |
| Apr 15 2024 | 2024 Q1 | AVGO, INDI, MSFT, NVDA, RIVN, TSLA, TSM, VKTX | - | - | - |
| Jan 27 2024 | 2023 Q4 | AMZN, ARGX, GPCR, ILMN, LRCX, MSFT, NVDA, TTD | - | - | - |
| Sep 30 2023 | 2023 Q3 | ARGX, DT, INDU, LEGN, MSFT, NVDA, RIVN | - | - | - |
| Jul 30 2023 | 2023 Q2 | AMZN, DAVA, ILMN, INDU, MBLY, MSFT, NVDA, RIVN, ZI | - | - | - |
| Mar 31 2023 | 2023 Q1 | AMZN, ARWR, CSGP, DAVA, DXCM, EW, INDU, IT, META, MRVL, MSFT, NVDA, RIVN, TSLA, ZI | - | - | - |
| Dec 31 2022 | 2022 Q4 | AMD, AMZN, CRWD, INDI, IT, MA, MSFT, NVDA, RCKT, RIVN, TSLA, V, XFCH, ZI | - | - | - |
| Sep 30 2022 | 2022 Q3 | ARGX, GOOG, INDI, ISRG, IT, MPWR, MSFT, NET, NOW, NVDA, RIVN, SHOP, TSLA, ZI | - | - | - |
| Jun 30 2022 | 2022 Q2 | AMD, AMZN, ARGX, ASML, GOOG, MSFT, NET, NVDA, TSLA | - | - | - |
| Mar 31 2022 | 2022 Q1 | ARWR, CDAY, CRWD, ILMN, MDB, MSFT, RIVN, SHOP, SWAV, TSLA, V | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
CloudCloud computing remains a core portfolio theme with strong positioning in hyperscale providers and infrastructure companies. Microsoft Azure showed 39% growth while Google Cloud exceeded 30% growth, both supported by AI workload adoption. The fund sees continued multi-year demand for cloud infrastructure and services as enterprises accelerate digital transformation. |
Azure Infrastructure Hyperscale Enterprise Growth | |
GLP1Eli Lilly represents the fund's exposure to the GLP-1 obesity and diabetes treatment market, which continues to show exceptional growth. Mounjaro and Zepbound sales more than doubled year-over-year, with demand continuing to outpace supply. The fund sees this as a multi-decade growth opportunity with expanding indications and sustained competitive advantages. |
Obesity Diabetes Pharmaceuticals Growth Innovation | |
SemiconductorsMACOM Technology Solutions rose nearly +40% as the company experienced broad-based demand, similar to many semiconductor companies in 2025. The team exited Astera Labs following industry conference presentations that suggested emerging competitive risks and concerns over single customer concentration, while initiating a position in Credo Technology for AI-connectivity exposure. |
Demand Competition Connectivity Customer Concentration | |
SpaceSpaceX is generating significant value with rapid expansion of Starlink broadband service, deploying vast satellite constellation with substantial user growth. The company has established itself as leading launch provider with reusable technology and is making tremendous progress on Starship rocket. SpaceX represents the fund's largest position at 19.2% of net assets. |
Satellites Launch Starlink Starship Reusable | |
StreamingNetflix represents the fund's exposure to global streaming entertainment, despite near-term headwinds from subscriber growth concerns and content spending. The fund continues to view Netflix as the dominant global streaming platform with durable competitive advantages through its content library, technology infrastructure, and growing advertising business. |
Content Global Advertising Platform Entertainment | |
| 2025 Q3 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
| 2025 Q2 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
US Equities |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | IT | Gartner, Inc. | Information Technology | Technology research & advisory | Bull | NYSE | competitive moat, Free Cash Flow, generative AI, Pricing power, recurring revenue, research, subscription revenue | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | PAR | PAR Technology Corporation | Information Technology | Restaurant POS software | Bull | NYSE | ARR growth, Free Cash Flow, operating leverage, Point of Sale, recurring revenue, Restaurant technology, Vertical SaaS | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | NEE | NextEra Energy, Inc. | Utilities | Electric Utilities | Bull | NYSE | Demographics, dividends, ratebase, Regulation, renewables, Solar, utilities, Wind | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | FFBC | First Financial Bancorp. | Financials | Regional Banks | Bull | NASDAQ | Banks, Credit, M&A, profitability, Regionals, Roa, Rotce, valuation | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | NVDA | NVIDIA Corporation | Information Technology | Graphics & AI processors | Bull | NASDAQ | Artificial Intelligence, competitive moat, data centers, Free Cash Flow, GPUs, hyperscalers, semiconductors, valuation | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | TSLA | Tesla, Inc. | Consumer Discretionary | Electric vehicles & energy storage | Bull | NASDAQ | Autonomy, Electric Vehicles, energy storage, growth, Margins, Software, valuation, vertical integration | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | AVGO | Broadcom Inc. | Information Technology | Data center & networking semiconductors | Bull | NASDAQ | AI infrastructure, ASICs, buybacks, capital allocation, data centers, dividends, Free Cash Flow, semiconductors | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | TTD | The Trade Desk, Inc. | Communication Services | Programmatic advertising platforms | Bull | NASDAQ | Competitive Advantage, Connected tv, digital advertising, Free Cash Flow, Identity, operating leverage, Programmatic | Login |
| TICKER | COMMENTARY |
|---|---|
| ACLX | Arcellx, Inc. is developing cell therapies for multiple myeloma, including lead candidate anito-cel in partnership with Gilead. Despite encouraging clinical results for anito-cel, Arcellx detracted from performance following Johnson & Johnson's announcement of strong data for its Tecvayli plus Darzalex combination in previously treated, Darzalex-naïve patients, suggesting increased competition for BCMA CAR-T therapies. |
| AMZN | This quarter, we took profits in our hyperscaler portfolio companies (Amazon and Google) and increased our position in NVIDIA. |
| 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. |
| AXON | Axon Enterprise Inc. develops and produces Taser weapons and body cameras for law enforcement agencies. Investors have grown accustomed to big beats and raises from Axon. A slight beat to third-quarter projections and mixed fourth-quarter guidance triggered a -21% decline. We added to the position due to solid customer growth and retention. There are also numerous growth drivers for their business including Taser 10, bodycam 4, and their artificial intelligence software bundle. |
| BRCM | We invested in Broadcom Inc. nearly two years ago after spending two hours with its CEO and founder, Hock Tan. Broadcom has already been a 2.5-bagger for the Fund. These returns resulted from explosive growth not multiple expansion. |
| CSGP | The shares of CoStar Group, Inc., the global leader in digitizing real estate, declined in the fourth quarter, due to concerns that the company's residential Homes.com platform will continue to require significant capital investment and competitive worries that Google's new real estate advertisement format and Zillow's OpenAI partnership could divert traffic from Homes.com in the years ahead. |
| DUOL | I have followed the company closely since the IPO since my wife was an avid user, not wanting to break her streak in learning Italian. I thought growth would drop off a cliff after COVID as happened with many other companies, and yet, quarter after quarter the company continued to execute. In fact, there are only four companies I can find that have grown revenues greater than 30% for at least the last 20 quarters in a row – MercadoLibre, Axon, Hims, and Duolingo. To have that growth endurance, you've got to be doing something right! Well, the stock was down almost 70% after the valuation got far too rich and management made it very clear they were prioritizing learning over monetization for 2026. That is the right call in my opinion, considering what the core competency of the company is. Duolingo shouldn't be thought of as a language learning app, it's an engagement machine that happens to educate. In service of its mission to make education widely available, it built the data-driven muscle of engaging users. To learn anything, the most difficult part is motivation and that is what Duolingo is good at. In fact, almost 40% of monthly users log into the app every day. For context, Snapchat is at 50%! You're telling me that an app that teaches you Spanish almost has the same level of engagement as the app where teens do all of their communication? As the company broadens its education subjects like math, music, chess, and other areas, retention should increase even more. If you get bored of learning a language, you can hop over to play some chess. And AI will allow the company to create better content for their current subjects and accelerate the broadening of the platform. Paired with the engagement muscle, Duolingo very well could become a must-have app for learning all sorts of things. This vision will take time but it's actually the exact vision of the CEO/founder. The main bear cases are AI translation and that no one actually learns anything. On the latter, it's up to the user. Duolingo can't force you to learn anything. But yes, education apps typically have very high churn. The fact that Duolingo is able to increase paid subs at a rapid rate despite the leaky bucket is incredibly impressive. On the former, language learning isn't all about practicality. For a large portion of users, they're trying to learn English and they actually really want to understand the language rather than use AI translating glasses. And secondly, Duolingo includes a structure for habit formation. The company is already embedding AI into its content program with its Max Tier so as the models improve, so should Duolingo's product. It's easy to say that high engagement, alone, isn't a moat and I'd agree but the company's core competency is A/B testing and therefore, the product improves at a much higher rate than competitors as it scales. We paid ~18x FCF, inclusive of stock-based comp. That's not super cheap but for a company with an exceptional founder and growth endurance rivaling our long-time holdings, MercadoLibre and Axon, we decided to finally start a position. |
| EXAS | The largest single contributor was Exact Sciences, which was acquired for a significant premium by Abbot Laboratories in November, resulting in an +86% return in the quarter for one of our higher-conviction positions. |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| GTLB | We initiated a new investment position in GitLab (GTLB), a Dev/Sec/Ops software platform vendor that helps software developers plan, build, and monitor code for new and existing applications. The stock has been under severe pressure for some time, largely due to the belief that AI-powered 'Vibe Coding' software companies will displace GTLB solutions. We fundamentally reject this thesis and believe that as software development becomes easier and more productive, more code will be generated, increasing the need for planning, development, and monitoring tools like GitLab's. We estimate GTLB's intrinsic value is $75 per share. |
| HRTX | Heartflow, Inc. is a medical device company providing an AI-powered engine to diagnose heart disease. Heart disease is responsible for 1 in 5 deaths in the U.S., and every 40 seconds someone has a heart attack. There is an urgent need to quickly and accurately catch this disease before it reaches this stage. Heartflow's solution provides a minimally invasive way to catch blockages in the heart vessels, reducing both false negatives and false positives relative to standard of care today. The company has a strong competitive moat, with a repository of 110 million images supplemented by human-aided training that has taken over 10 years to build. |
| LLY | Eli Lilly shares were a top performer in 4Q25 after delivering strong Q3 2025 earnings in October. Revenue rose 54% year-over-year to $17.6 billion, and adjusted EPS of $7.02 beat consensus of $6.02. Growth was driven by its GLP-1 franchises, Mounjaro and Zepbound, where sales more than doubled year-over-year, alongside strength in other therapeutic areas. Management raised full-year guidance for both revenue and earnings, reinforcing investor confidence in the company's growth outlook. |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| NVDA | Capital spending from Google, Microsoft, Amazon, Meta, OpenAI, and more have led to Nvidia becoming the Rrst 5 trillion market cap company. |
| ONON | On Holding, a premium athletic footwear and apparel company gaining share globally. On Holding delivered an impressive quarter punctuated by strong growth in international markets, such as China, as well as accelerating growth from apparel. |
| ORCL | Investor enthusiasm for Oracle's stock in calendar year 2025 was initially driven by several multi-billion-dollar contracts it signed with leading AI companies, including OpenAI and Meta. However, in Q4 sentiment for ORCL's growth prospects shifted to skepticism, as investors began to scrutinize the return profile of the substantial capital investments required to support the approximately $500 billion of contracts signed by Oracle. Given the widening range of potential outcomes associated with Oracle's elevated capital needs, we reduced our position in ORCL during Q4. |
| SPOT | Spotify is the world's leading audio streaming platform. Third-quarter results showed continued operating progress, with users increasing 11% to 713 million and subscribers growing 12% to 281 million. Meanwhile, operating income expanded to a mid-teens margin, alongside a record quarterly free cash flow. Despite the momentum, the shares weakened as investors reset near-term margin expectations. Spotify has been a top contributor to long-term Fund performance, and we remain confident that pricing, product innovation, advertising efficiency, and an expanding ecosystem can continue to widen margins over time, as reinforced this quarter by the launch of Spotify recommendations within ChatGPT. |
| TSLA | Under the previous system, companies that produced only electric vehicles—most notably Tesla—generated large quantities of credits that could then be sold to manufacturers falling short of their EV production targets, allowing them to avoid regulatory penalties. |
| TTD | Communication Services also detracted from relative performance, driven by early-year weakness in The Trade Desk (TTD). The company, one of the world's largest independent demand-side advertising platforms, faced its first revenue miss in more than eight years and issued softer-than-consensus expected guidance. These challenges were compounded by disruptions from a sales reorganization and slower adoption of its new AI-powered platform, Kokai. |
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