Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund declined 13.4% (Institutional Shares) in the first quarter compared to a 10.0% decline for the Russell 1000 Growth Index and a 4.3% decrease for the S&P 500 Index. The Fund focuses on investing in Big Ideas, which often trade and can be considered long-duration assets. As a result, the portfolio frequently experiences significant stock price fluctuations, particularly in the short term and during periods of extreme market volatility, while the intrinsic values of businesses remain much more stable. Nevertheless, Q1 was a challenging first quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, Baron Fifth Avenue Growth Fund highlighted stocks such as Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was -2.47%, and its shares lost 5.62% of their value over the last 52 weeks. On June 20, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $167.73 per share, with a market capitalization of $2.028 trillion.
Baron Fifth Avenue Growth Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q1 2025 investor letter:
“We also added to the following existing positions. The parent company of Google, the world’s largest search and online advertising company, Alphabet Inc. (NASDAQ:GOOG) – While the company continues to hold over 90% market share in search, it also owns the world’s leading video platform, YouTube, a leading hyperscaler, Google Cloud, a leading ad network, and optionality in a number of smaller subsidiaries like the autonomous vehicle company, Waymo.”
A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 164 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter which was 174 in the previous quarter. In the first quarter of 2025, Alphabet Inc. (NASDAQ: GOOG) achieved a revenue of $90.2 billion, representing an increase of 12% from Q1 2024. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared Hinde Group’s views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of GOOG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
