Baron Funds, an investment management company, released its “Baron Global Advantage Fund” investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. In the second quarter, the fund returned 22.7% (Institutional Shares), compared to the MSCI ACWI Index’s (the Index) 11.5% gain and the MSCI ACWI Growth Index’s 17.3% gain. The Fund is up 11.2%, year-to-date, compared to gains of 10.1% and 9.3% for the benchmarks, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its second-quarter 2025 investor letter, Baron Global Advantage Fund highlighted stocks such as NVIDIA Corporation (NASDAQ: NVDA). NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute, and networking solutions. The one-month return of NVIDIA Corporation (NASDAQ:NVDA) was 12.50%, and its shares gained 72.66% of their value over the last 52 weeks. On August 4, 2025, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $180.00 per share, with a market capitalization of $4.39 trillion.
Baron Global Advantage Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its second quarter 2025 investor letter:
“Twenty of our investments posted quarterly gains of over 20%, while Cloudflare, NVIDIA Corporation (NASDAQ:NVDA), Snowflake, Zscaler, CrowdStrike, and indie Semiconductor appreciated over 40% each. NVIDIA’s stock price had a 37% drawdown during the first half of 2025. The “DeepSeek moment” was misunderstood or misinterpreted by investors. We argued in the last quarterly letter that it will actually drive an expansion in demand for inference reasoning AI. On its most recent earnings call, Microsoft’s CEO stated: “We processed over 100 trillion tokens this quarter, up 5x year-over-year, including a record 50 trillion tokens last month alone.” After spending the better part of a week at NVIDIA’s developer conference (you can read details about it in the last quarterly letter) we were all bulled up with “a line of sight to projects requiring tens of gigawatts of NVIDIA AI infrastructure in the not-too-distant future4” with every gigawatt representing a “$40 billion to $50 billion opportunity for NVIDIA.” Finally, scaling laws have expanded from the original pre-training scaling (the model’s quality improves with more compute, more data, and a larger model size) to post-training (teaching models to be more task-specific) and time-test scaling (thinking longer on more complex questions) – which all drive demand for graphics processing units (GPUs). Our conviction that NVIDIA is at the epicenter of the most transformative technology of our lifetime (which is saying a lot since we have all experienced the Internet, the Smart phone, and the Cloud) remains unshaken.
NVIDIA Corporation is a fabless semiconductor company specializing in compute and networking platforms for accelerated computing. Its dominant position in AI infrastructure with a comprehensive portfolio spanning GPUs, systems, software, and high-performance networking solutions, continues to drive strong performance. Shares rose 45.8% during the quarter as increasing data points emerged that the AI cluster buildout is likely to be durable, with NVIDIA maintaining its leadership, driven by scaling laws expanding outside of pre-training, demand for reasoning based inference accelerating following DeepSeek and AI factory investments starting to realize. The company also removed all AI related revenue contributions from China, effectively de-risking that part of the business. We maintain a long-term constructive view, as leading AI labs show growing confidence in their ability to achieve human-level intelligence and deploy AI products in enterprise settings. All the industries bottlenecked by intelligence will leverage AI, unlocking trillions of dollars in value. Most of these AI workloads will be supported by large language models running in the datacenters. NVIDIA is uniquely positioned to power this transformation through its full-stack approach, spanning silicon, systems, software, and developer ecosystem, and hence its competitive moat continues to widen.”
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA) is in 5th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 212 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the first quarter, which was 223 in the previous quarter. NVIDIA Corporation (NASDAQ:NVDA) reported another record quarter in the fiscal first quarter of 2026 with $44 billion in revenues, representing a 69% year-over-year increase. While we acknowledge the risk and potential of NVIDIA Corporation (NASDAQ:NVDA) 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 NVIDIA Corporation (NASDAQ:NVDA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered NVIDIA Corporation (NASDAQ:NVDA) and shared the list of AI stocks making waves on Wall Street. NVIDIA Corporation (NASDAQ:NVDA) was RiverPark Large Growth Fund’s top contributor during the second quarter of 2025. In addition, please check out our hedge fund investor letters Q2 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.
