Baron Funds, an investment management company, released its “Baron Asset Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. stocks rose amid volatility caused by tariff policies and Middle East tensions. Early April risk-off sentiment was fueled by Trump’s “Liberation Day” tariffs, seen as more severe than expected. U.S. equities rose after April 8, driven by favorable trade news, strong earnings, dovish Fed signals, and AI momentum, reaching record highs by quarter’s end. During the second quarter, the fund was up 7.85% (Institutional Shares) compared to an 18.20% gain for the Russell Midcap Growth Index. 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 Asset Fund highlighted stocks such as Samsara Inc. (NYSE:IOT). Samsara Inc. (NYSE:IOT) offers solutions to connect physical operations data to its connected operations cloud. The one-month return of Samsara Inc. (NYSE:IOT) was -2.76%, and its shares gained 7.43% of their value over the last 52 weeks. On July 31, 2025, Samsara Inc. (NYSE:IOT) stock closed at $38.69 per share, with a market capitalization of $21.652 billion.
Baron Asset Fund stated the following regarding Samsara Inc. (NYSE:IOT) in its second quarter 2025 investor letter:
“Samsara Inc. (NYSE:IOT) was a new addition to the Fund during the quarter. The company provides a cloud-based software platform for commercial vehicle telematics, video-based driver safety, driver workflow automation, and industrial equipment monitoring. Its software collects and analyzes data from sensors and cameras installed in its customers’ commercial trucks, construction equipment, warehouses, and other assets, helping companies visualize and improve the state of their operations. More than 20,000 customers in the transportation, field services, construction, utilities, and other industries have adopted Samsara, and the company recently became one of the fastest software companies ever to reach $1.5 billion in ARR.
Samsara has been winning share from competitors in the $51 billion market for connected fleet software because of its superior cloud native architecture, ability to address multiple use cases in a single platform, and its rapid product release cycle. Importantly, as Samsara continues to expand its connected asset base, we believe it is building an unmatched data asset that drives better outcomes for its customers relative to its competitors. Capturing more than 14 trillion data points from over 80 billion miles driven spanning roughly 99% of major U.S. roads, Samsara uses AI to help companies optimize their vehicle routes, prevent accidents, improve asset utilization, conduct predictive maintenance, and lower insurance premiums. In fiscal year 2025, across its customer base, the company prevented 250,000 accidents and reduced carbon emissions by 3 billion pounds. Seeing a fast and tangible return on investment, customers have renewed and expanded their Samsara subscriptions at a healthy rate.
We anticipate a long runway for growth as Samsara expands into existing accounts and wins new customer logos. Samsara is less than 50% penetrated in its existing customers’ vehicle fleets and has a significant opportunity to cross-sell newer non-vehicle products (which already account for more than $200 million of ARR) into its base. The company has also increased its customer count by approximately 20% year-over-year every quarter and identified hundreds of thousands of potential new accounts to win. As it has scaled, Samsara has delivered healthy operating leverage, and we think free cash flow margins can expand to more than 20% longer term.”
A data analyst wearing virtual reality goggles while analyzing on-board telematics.
Samsara Inc. (NYSE:IOT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Samsara Inc. (NYSE:IOT) at the end of the first quarter, which was 40 in the previous quarter. Samsara Inc. (NYSE: IOT) reported a revenue of $367 million for Q1, representing a growth of 31% compared to Q1 2024. While we acknowledge the risk and potential of Samsara Inc. (NYSE:IOT) 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 SAMSARA INC. (NYSE:IOT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Samsara Inc. (NYSE:IOT) and shared Baron Fifth Avenue Growth Fund’s views on the company in the previous quarter. 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.
