Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund declined 13.4% (Institutional Shares) in the first quarter compared to a 10.0% decline for the Russell 1000 Growth Index and a 4.3% decrease for the S&P 500 Index. The Fund focuses on investing in Big Ideas, which often trade and can be considered long-duration assets. As a result, the portfolio frequently experiences significant stock price fluctuations, particularly in the short term and during periods of extreme market volatility, while the intrinsic values of businesses remain much more stable. Nevertheless, Q1 was a challenging first quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, Baron Fifth Avenue Growth Fund highlighted stocks such as Samsara Inc. (NYSE:IOT). Samsara Inc. (NYSE:IOT) offers solutions to connect physical operations data to its connected operations cloud. The one-month return of Samsara Inc. (NYSE:IOT) was -16.15%, and its shares gained 30.71% of their value over the last 52 weeks. On June 18, 2025, Samsara Inc. (NYSE:IOT) stock closed at $38.69 per share, with a market capitalization of $22.028 billion.
Baron Fifth Avenue Growth Fund stated the following regarding Samsara Inc. (NYSE:IOT) in its Q1 2025 investor letter:
“In terms of existing names, our largest add in the quarter was Samsara Inc. (NYSE:IOT), which provides a cloud software platform for commercial vehicle telematics, video-based driver safety, driver workflow automation, and industrial equipment monitoring. Its software collects and analyzes data from sensors and cameras installed in its customers’ commercial trucks, construction equipment, warehouses, and other assets, helping companies visualize and improve the state of their operations. We took advantage of the sell-off in the stock, which declined from a peak of $61 in February into the $30s on investor concerns related to the potential headwinds from tariffs and a macro downturn. While the company in the past has proven resilient to downturns (we believe due to its high and immediate ROI to customers and its exposure to essential services (e.g., waste management and food delivery), even if there was a cyclical impact to the business, we believe the company’s uniqueness and long runway for growth create an opportunity to invest in a great business at an attractive valuation for investors with a long enough time horizon. Samsara’s leading video-based safety continues to drive higher win rates against telematics-only competitors, and it is reaching a data scale that makes it tough for any video-based safety alternative to catch up as its data moat widens, driving better safety, cost savings, and ROI for customers: “We’ve now built one of the world’s largest operational data assets with over 14 trillion data points processed annually, representing over 50% year-over-year growth.”7 These data points span 80 billion miles traveled (25%-plus year-over-year growth) and 120 billion-plus API calls (50%-plus year-over-year growth). Samsara prevented 250,000 accidents, digitized 300 million workflows, and reduced 3 billion pounds of CO2 emissions. Moreover, we believe that the company would benefit from a long growth runway as video-based safety products are currently attached to just 10% total commercial vehicles on the road, while new growth drivers are just getting started, including non-vehicle products like asset tags and its AI-based Samsara Intelligence.”
A data analyst wearing virtual reality goggles while analyzing on-board telematics.
Samsara Inc. (NYSE:IOT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Samsara Inc. (NYSE:IOT) at the end of the first quarter, which was 40 in the previous quarter. Samsara Inc. (NYSE: IOT) reported a revenue of $367 million for Q1, representing a growth of 31% compared to Q1 2024. While we acknowledge the potential of Samsara Inc. (NYSE:IOT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Samsara Inc. (NYSE:IOT) and shared Sands Capital Global Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of IOT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
