Airbnb (ABNB) Declined in Q3 Despite Reporting Strong Results

Baron Funds, an investment management company, released its “Baron Real Estate Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund delivered strong results in the quarter. The fund appreciated 10.25% (Institutional Shares) compared to the MSCI US REIT Index’s (the REIT Index) 4.49% and the MSCI USA IMI Extended Real Estate Index’s 5.65%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Baron Real Estate Fund highlighted stocks such as Airbnb, Inc. (NASDAQ:ABNB). Headquartered in San Francisco, California, Airbnb, Inc. (NASDAQ:ABNB) operates a platform that connects hosts and guests. The one-month return of Airbnb, Inc. (NASDAQ:ABNB) was -1.39%, and its shares lost 7.71% of their value over the last 52 weeks. On November 11, 2025, Airbnb, Inc. (NASDAQ:ABNB) stock closed at $122.53 per share, with a market capitalization of $74.296 billion.

Baron Real Estate Fund stated the following regarding Airbnb, Inc. (NASDAQ:ABNB) in its third quarter 2025 investor letter:

“The shares of Airbnb, Inc. (NASDAQ:ABNB), the largest technology-enabled hospitality platform in the world with 8 million listings and 5 million hosts across 220 countries and 100,000 cities, detracted from performance in the most recent quarter despite reporting robust second quarter results. Market concerns centered around expectations for a sequential growth deceleration in the third quarter due to tougher year-over-year growth comparisons, broader leisure travel trends in an uncertain economic environment, and the company’s upcoming guidance regarding potential incremental investments and their possible negative impact on cash flow margins in 2026.

As a reminder, we initiated a position in the second quarter at an attractive cost basis where we took advantage of the indiscriminate sell-off in April to buy a high-quality company that was on sale. We remain optimistic regarding the multi-year prospects for Airbnb due to: i) its leading share in alternative accommodations and scale driving strong brand awareness and repeat bookings; ii) the company’s 90% direct traffic allowing for lower customer acquisition costs; iii) its strong value proposition to both guests and hosts leading to differentiated listings and exclusive inventory; iv) the company’s unique two-sided market place of user reviews curating an ecosystem of trust between guests and hosts; and v) Airbnb’s imbedded free call options with the company’s recently launched Experiences, Services, and other incremental products to be introduced in the coming years (e.g. longer-term stay apartments, host services, partnerships).”

Airbnb Inc (ABNB) Comes From An "Era" Of Winners, Says Jim Cramer

Airbnb, Inc. (NASDAQ:ABNB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 79 hedge fund portfolios held Airbnb, Inc. (NASDAQ:ABNB) at the end of the second quarter, up from 66 in the previous quarter. Airbnb, Inc. (NASDAQ:ABNB) reported revenue of $4.1 billion in the third quarter of 2025, marking an increase of 10% year-over-year. While we acknowledge the risk and potential of Airbnb, Inc. (NASDAQ:ABNB) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Airbnb, Inc. (NASDAQ:ABNB) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Airbnb, Inc. (NASDAQ:ABNB) and shared the list of best up and coming stocks to buy. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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