Here’s Why Red Rock Resorts (RRR) Rose in Q3

Baron Funds, an investment management company, released its “Baron Small Cap Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter of 2025, the fund was up 0.54% (Institutional Shares) compared to the Russell 2000 Growth Index’s (the Index) 12.19% return. Year to date, the Fund is up 0.91% compared to the index’s 11.65% return. 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 Small Cap Fund highlighted stocks such as Red Rock Resorts, Inc. (NASDAQ:RRR). Headquartered in Las Vegas, Nevada, Red Rock Resorts, Inc. (NASDAQ:RRR) develops and operates casino and entertainment properties. One-month return of Red Rock Resorts, Inc. (NASDAQ:RRR) was -0.90%, and its shares gained 3.68% of their value over the last 52 weeks. On November 6, 2025, Red Rock Resorts, Inc. (NASDAQ:RRR) stock closed at $55.23 per share, with a market capitalization of $5.659 billion.

Baron Small Cap Fund stated the following regarding Red Rock Resorts, Inc. (NASDAQ:RRR) in its third quarter 2025 investor letter:

“Red Rock Resorts, Inc. (NASDAQ:RRR) is a casino owner and operator focused on the Las Vegas Locals market. Shares rose during the quarter as investors reacted positively to incremental visitation from new customers and accelerating spend-per-visit trends, despite concerns about a market slowdown. Red Rock is regaining business at its flagship resort following some initial cannibalization from the opening of its Durango property, with management expecting a full recovery next year and trends already improving faster than anticipated. The new property is generating robust returns, and performance across the company’s six core casinos has strengthened, as the Las Vegas Locals market absorbs Durango and returns to its historical low single-digit growth rate. Given the strength of the market, management continues to ramp up capital investment and has a decade of strong new bold projects on the docket which we believe should drive a doubling of EBITDA overtime.”

Red Rock Resorts, Inc. (NASDAQ:RRR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 32 hedge fund portfolios held Red Rock Resorts, Inc. (NASDAQ:RRR) at the end of the second quarter, up from 26 in the previous quarter. While we acknowledge the risk and potential of Red Rock Resorts, Inc. (NASDAQ:RRR) 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 Red Rock Resorts, Inc. (NASDAQ:RRR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Red Rock Resorts, Inc. (NASDAQ:RRR) and shared Diamond Hill Select Fund’s views on the company. 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.