Baron Funds, an investment management company, released its “Baron Technology Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equities rallied in the third quarter following the previous quarter. In the third quarter, the fund returned 5.89% (Institutional Shares) but underperformed the MSCI ACWI Information Technology Index’s (the Benchmark) 12.76% return, Invesco QQQ Trust’s (the QQQ) 8.94% return, and the S&P 500 index’s 8.12% return. 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 Technology Fund highlighted stocks such as Broadcom Inc. (NASDAQ:AVGO). Broadcom Inc. (NASDAQ:AVGO) is a leading technology company that designs and develops various semiconductor and infrastructure software solutions. The one-month return of Broadcom Inc. (NASDAQ:AVGO) was -2.04%, and its shares gained 95.31% of their value over the last 52 weeks. On November 7, 2025, Broadcom Inc. (NASDAQ:AVGO) stock closed at $349.43 per share, with a market capitalization of $1.65 trillion.
Baron Technology Fund stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its third quarter 2025 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) is a leading semiconductor and enterprise software company, generating approximately 60% of revenue from semiconductors and 40% from software. The company is strategically positioned at the intersection of high-performance AI compute and networking infrastructure, while also demonstrating disciplined execution in software. Broadcom has extended its leadership in networking silicon from the cloud era into the AI era and is regarded as the most reliable silicon partner for AI foundational model builders designing custom chips to train frontier models. Shares rose during the quarter on accelerating momentum in Broadcom’s AI product lines and strong business visibility into next year. In its July quarter, Broadcom reported almost $16 billion in total revenue, up 22%; $5.2 billion in AI revenue, up 63%; and $6.8 billion in software revenue, up 17%. Broadcom continued to demonstrate excellent profitability, with EBITDA margins over 67% and free cash flow margins at 44%. While Broadcom continues to execute with its key custom AI accelerator customer, Google, it is on track for volume production with two additional customers (likely Meta and ByteDance), has secured a fourth customer with orders worth $10 billion next year, and announced a 10 GW deal with a notable fifth customer, OpenAI. Beyond AI, Broadcom is advancing VMware integration, while its non-AI semiconductor businesses appear to be bottoming and may gradually recover in the coming quarters. We retain our long term conviction in Broadcom’s position within the AI ecosystem.”
Broadcom Inc. (NASDAQ:AVGO) is in the 12th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 156 hedge fund portfolios held Broadcom Inc. (NASDAQ:AVGO) at the end of the second quarter, compared to 158 in the previous quarter. In the fiscal third quarter of 2025, Broadcom Inc. (NASDAQ:AVGO) reported record revenue of $16 billion, up 22% year-over-year. While we acknowledge the risk and potential of Broadcom Inc. (NASDAQ:AVGO) 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 Broadcom Inc. (NASDAQ:AVGO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Broadcom Inc. (NASDAQ:AVGO) and shared the list of best AI stocks to buy according to American politicians. 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.
