Baron Capital, an investment management company, released its Q1 2026 investor letter for the “Baron Asset Fund”. A copy of the letter is available to download here. U.S. equity markets started the year on a positive note. In February, market dynamics changed due to concerns about AI disruption, accelerated by U.S. and Israeli military action in Iran in March, raising fears of higher oil prices. The Fund declined 7.81% (Institutional Shares) for the quarter, versus a 6.35% decline in the Russell Midcap Growth Index. Performance was adversely impacted by overexposure to the software and services sectors and underexposure to the energy industries. Despite this, the Firm remains optimistic about the market recognizing high-quality businesses owned by the Fund, given their resilience against perceived AI threats. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Baron Asset Fund highlighted stocks such as IDEXX Laboratories, Inc. (NASDAQ:IDXX). IDEXX Laboratories, Inc. (NASDAQ:IDXX) is a US-based healthcare company that manufactures products for the companion animal veterinary, livestock and poultry, dairy, and water testing industries. On May 13, 2026, IDEXX Laboratories, Inc. (NASDAQ:IDXX) stock closed at $528.68 per share. IDEXX Laboratories, Inc. (NASDAQ:IDXX) delivered a -7.24% return in the past month, and its shares gained 3.26% over the past twelve months. IDEXX Laboratories, Inc. (NASDAQ:IDXX) has a market capitalization of $41.70 billion.
Baron Asset Fund stated the following regarding IDEXX Laboratories, Inc. (NASDAQ:IDXX) in its Q1 2026 investor letter:
“Performance in Health Care was hindered by veterinary diagnostics leader IDEXX Laboratories, Inc. (NASDAQ:IDXX), whose shares price declined despite reporting better-than expected financial results. Foot traffic to veterinary clinics in the U.S. remains modestly negative but is poised to recover over the next several years. Even so, IDEXX’s excellent execution has enabled the company to continue delivering robust performance. We believe IDEXX’s competitive trends are outstanding, and we expect new proprietary innovations—such as InVue, MultiCue, and CancerDX—to be meaningful contributors to growth in the years ahead. We also see increasing evidence that long-term secular trends around pet ownership and pet care spending have structurally accelerated, which should help support IDEXX’s long term growth rate.”
IDEXX Laboratories, Inc. (NASDAQ:IDXX) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 58 hedge fund portfolios held IDEXX Laboratories, Inc. (NASDAQ:IDXX) at the end of the fourth quarter, up from 55 in the previous quarter. In Q1 2026, IDEXX Laboratories, Inc.’s (NASDAQ:IDXX) revenue increased 14% year-over-year on reported and 11% on organic basis. While we acknowledge the risk and potential of IDEXX Laboratories, Inc. (NASDAQ:IDXX) 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 IDEXX Laboratories, Inc. (NASDAQ:IDXX) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered IDEXX Laboratories, Inc. (NASDAQ:IDXX) and shared the list of best cancer stocks to buy for the long term. In addition, please check out our hedge fund investor letters Q1 2026 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.
