Here’s What Weighed on Eli Lilly and Company’s (LLY) Performance

Baron Funds, an investment management company, released its “Baron Health Care Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund rose 5.39% (Institutional Shares) in the quarter, compared to a 5.05% gain for the Russell 3000 Health Care Index (benchmark) and an 8.18% gain for the Russell 3000 Index (the Index). The Fund performed similarly to the Benchmark this quarter. Solid stock selection was primarily offset by negative effects from active sub-industry allocations and cash holdings during a rising market. 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 Health Care Fund highlighted stocks such as Eli Lilly and Company (NYSE:LLY). Eli Lilly and Company (NYSE:LLY) is a pharmaceutical company headquartered in Indianapolis, Indiana. The one-month return of Eli Lilly and Company (NYSE:LLY) was 6.27%, and its shares gained 11.22% of their value over the last 52 weeks. On November 3, 2025, Eli Lilly and Company (NYSE:LLY) stock closed at $896.53 per share, with a market capitalization of $802.411 billion.

Baron Health Care Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its third quarter 2025 investor letter:

“Eli Lilly and Company (NYSE:LLY) is a global pharmaceutical company currently best known for its GLP-1 treatments for diabetes and obesity. Shares declined after Phase 3 data for Lilly’s oral orforglipron in obesity fell short of elevated investor expectations. Investors had anticipated roughly 13% to 14% placebo-adjusted weight loss, while the trial showed 11.5%. The stock was also pressured by broader regulatory uncertainty related to potential sector tariffs and drug pricing risks. We view these risks as manageable and believe Lilly is among the least exposed pharmaceutical companies to both. We continue to believe orforglipron will be an important treatment option, as physicians and patients are likely to value the convenience of a daily oral therapy. Long term, we expect the GLP-1 drug class to become the standard of care for diabetes and obesity, ultimately representing a $150 billion-plus market, and believe Lilly possesses the leading portfolio in this category. In our view, GLP-1 adoption remains in the early stages, and continued uptake should drive a near doubling of Lilly’s total revenues by 2030.”

Was Jim Cramer Right About Eli Lilly and Company (LLY)?

Eli Lilly and Company (NYSE:LLY) is in 21st position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 119 hedge fund portfolios held Eli Lilly and Company (NYSE:LLY) at the end of the second quarter, the same as in the previous quarter. In the third quarter of 2025, Eli Lilly and Company’s (NYSE:LLY) revenue grew 54% compared to the same period last year. While we acknowledge the risk and potential of Eli Lilly and Company (NYSE:LLY) 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 Eli Lilly and Company (NYSE:LLY) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Eli Lilly and Company (NYSE:LLY) and shared the list of stocks Jim Cramer discussed recently. 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.