Guidewire (GWRE) Sets to Capture 30-50% Market Share in the P&C Insurance Industry

Baron Funds, an investment management company, released its fourth-quarter investor letter for the “Baron Focused Growth Fund”. A copy of the letter can be downloaded here. The Fund delivered strong results in the fourth quarter, appreciating 12.34% (Institutional Shares) compared to the Russell 2500 Growth Index’s (the Benchmark) 0.33 % return. The Fund returned 22.26% in 2025 compared to 10.31% return for the index. The firm highlighted its continued faith in its portfolio companies in the letter. As of December 31, 2025, the Fund’s top 10 positions hold 60.1% of net assets. 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 Focused Growth Fund highlighted stocks like Guidewire Software, Inc. (NYSE:GWRE). Guidewire Software, Inc. (NYSE:GWRE) is a cloud-based platform for property and casualty (P&C) insurance companies, which fell 12.6% and reduced quarterly performance by 62 bps. On February 5, 2026, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $125.99 per share. Guidewire Software, Inc. (NYSE:GWRE) delivered a -31.97% return in the past month, and its shares are down 41.00% over the past twelve months. Guidewire Software, Inc. (NYSE:GWRE) has a market capitalization of $10.712 billion.

Baron Focused Growth Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its fourth quarter 2025 investor letter:

“Property and casualty (P&C) insurance software vendor Guidewire Software, Inc. (NYSE:GWRE) declined 12.6% in the fourth quarter and detracted 62 bps from performance. However, the company continues to do quite well and after a multi-year transition period, the company’s cloud transition is substantially complete and insurers are upgrading to the cloud at an accelerated rate. We believe that cloud will be the sole path forward, with annual recurring revenue (ARR) benefiting from new customer wins and migrations of the existing customer base to the company’s Insurance Suite Cloud. We also expect the company to shift R&D resources to product development from infrastructure investment, which should help drive cross-sales into its sticky installed base and potentially accelerate ARR over time. We are encouraged by Guidewire’s subscription gross margin expansion, which improved by approximately 280 bps in its most recently reported quarter. We believe Guidewire will be the critical software vendor for the global P&C insurance industry, capturing 30% to 50% of its $15 billion to $30 billion total addressable market and generating margins above 40%.”

Why Guidewire Software Inc (GWRE) is Skyrocketing So Far in 2025?

Guidewire Software, Inc. (NYSE:GWRE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 72 hedge fund portfolios held Guidewire Software, Inc. (NYSE:GWRE) at the end of the third quarter, up from 67 in the previous quarter. Guidewire Software, Inc. (NYSE:GWRE) delivered $333 million in total revenue for the first quarter of fiscal 2026, an increase of 27% YoY. While we acknowledge the risk and potential of Guidewire Software, Inc. (NYSE:GWRE) 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 Guidewire Software, Inc. (NYSE:GWRE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Guidewire Software, Inc. (NYSE:GWRE) and shared the list of best strong buy growth stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.