Does Toast (TOST) Have Profitable Growth Potential?

Harbor Capital Appreciation Fund, an investment management company, released its Q3 2025 investor letter. A copy of the same can be downloaded here. The Harbor Capital Appreciation Fund primarily focuses on investing in equity securities, targeting U.S. companies that have a market capitalization of at least $1 billion at the time of investment. US equities delivered solid results in the third quarter, driven by continued momentum in AI and strong corporate earnings. The Federal Reserve’s interest rate cut also supported the market at the end of the quarter. The fund returned 5.11% in the quarter compared to 10.51% for the Russell 1000® Growth Index and 8.12% for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Harbor Capital Appreciation Fund highlighted stocks such as Toast, Inc. (NYSE:TOST). Toast, Inc. (NYSE:TOST) is a cloud-based digital technology platform for the restaurant industry. The one-month return for Toast, Inc. (NYSE:TOST) was 8.80%, and its shares lost 4.92% over the last 52 weeks. On December 24, 2025, Toast, Inc. (NYSE:TOST) stock closed at $36.49 per share, with a market capitalization of $21.456 billion.

Harbor Capital Appreciation Fund stated the following regarding Toast, Inc. (NYSE:TOST) in its third quarter 2025 investor letter:

“We initiated a position in Toast, Inc. (NYSE:TOST), a leader in cloud-based restaurant technology serving a large, under-penetrated market. Toast provides an integrated platform for point-of-sale, payments, operations, and guest engagement, helping restaurants improve efficiency, streamline workflows, and enhance the customer experience. Expansion into enterprise and international markets, along with a strong recurring revenue model, position Toast for profitable growth potential.”

Toast Inc. (TOST) Declines 7.1% on Broader Market Downturn

Toast, Inc. (NYSE:TOST) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 56 hedge fund portfolios held Toast, Inc. (NYSE:TOST) at the end of the third quarter, compared to 67 in the previous quarter. While we acknowledge the risk and potential of Toast, Inc. (NYSE:TOST) 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 Toast, Inc. (NYSE:TOST) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Toast, Inc. (NYSE:TOST) and shared the list of most promising fintech stocks to invest in. 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.