Baron Funds, an investment management company, released its “Baron Discovery Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund focuses on long-term, competitively positioned companies that are well-managed and have significant potential in untapped markets. The letter also addressed the advancements in AI and how humans define themselves in the changing landscape. In Q4, the fund generated a return of 0.19% (Institutional Shares), underperforming the Russell 2000 Growth Index by 1.03 percentage points. Over the entire year, the fund posted a return of 10.96%, while the Index returned 13.01%. The outperformance of low-quality and short-term price momentum-oriented stocks affected the Fund’s focus on long-term valuation metrics. The top 10 holdings comprised 26.7% of the Fund’s net assets, with cash making up 3.3%. The Fund maintains strong optimism and expects a high-growth, low-inflation environment in 2026. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Baron Discovery Fund highlighted GCI Liberty, Inc. (NASDAQ:GLIBK). GCI Liberty, Inc. (NASDAQ:GLIBK) is a communication services company that provides a range of data, wireless, video, voice, and managed services. The one-month return of GCI Liberty, Inc. (NASDAQ:GLIBK) was 1.92%, and in three months its shares gained 9.50% of their value. On January 3, 2026, GCI Liberty, Inc. (NASDAQ:GLIBK) stock closed at $38.17 per share, with a market capitalization of $1.519 billion.
Baron Discovery Fund stated the following regarding GCI Liberty, Inc. (NASDAQ:GLIBK) in its fourth quarter 2025 investor letter:
During the quarter, we initiated a position in GCI Liberty, Inc. (NASDAQ:GLIBK). GCI is the leading broadband cable provider in Alaska. GCI generates revenue from broadband and wireless services. Roughly 97% of Alaskans live within GCI’s network footprint and about 80% have access to high-speed tiers (2.5 Gbps+). We estimate that GCI has 70% to 80% market share of high-speed broadband in Alaska. For mobile services, GCI operates its own mobile network competing in an oligopoly with AT&T and Verizon. Revenues are evenly split between residential and business customers.
Alaska has unique population density characteristics that create a very high-cost environment that necessitates government funding. In addition, the competitive environment for Alaskan cable is more attractive than in the lower 48 states. Most notably, fiber over-build has had limited success given substantially higher costs and fixed wireless access has limitations due to the harsh elements in Alaska. GCI is completing an upgrade cycle in 2026 resulting in improved free cash flow generation in 2027 and beyond. We believe the current valuation offers a double-digit free cash flow yield.
GCI Liberty, Inc. (NASDAQ:GLIBK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 38 hedge fund portfolios held GCI Liberty, Inc. (NASDAQ:GLIBK) at the end of the third quarter. While we acknowledge the risk and potential of GCI Liberty, Inc. (NASDAQ:GLIBK) 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 GCI Liberty, Inc. (NASDAQ:GLIBK) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered GCI Liberty, Inc. (NASDAQ:GLIBK) and shared Madison Mid Cap Fund’s views on the company last quarter. In addition, please check out our hedge fund investor letters Q4 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.
