Should You Hold LPL Financial Holdings (LPLA)?

Baron Funds, an investment management company, released its “Baron FinTech Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund fell 4.29% (Institutional Shares) compared to a 1.90% decline for the FactSet Global FinTech Index (Benchmark). Since its inception, the fund has appreciated at an annualized rate of 11.10%, compared to a 4.00% return for the Benchmark. The market strength in the quarter was primarily driven by the resumption of Federal Reserve (the Fed) rate cuts and AI optimism. 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 FinTech Fund highlighted stocks such as LPL Financial Holdings Inc. (NASDAQ:LPLA). Based in San Diego, California, LPL Financial Holdings Inc. (NASDAQ:LPLA) offers an integrated platform of brokerage and investment advisory services. The one-month return of LPL Financial Holdings Inc. (NASDAQ:LPLA) was 9.05%, and its shares gained 17.73% of their value over the last 52 weeks. On November 14, 2025, LPL Financial Holdings Inc. (NASDAQ:LPLA) stock closed at $370.59 per share, with a market capitalization of $29.809 billion.

Baron FinTech Fund stated the following regarding LPL Financial Holdings Inc. (NASDAQ:LPLA) in its third quarter 2025 investor letter:

“Weakness in Tech-Enabled Financials was driven by declines from our insurance holdings, as softer industry pricing and lower interest rates weigh on growth. We trimmed our insurance exposure at higher prices earlier in the year in anticipation of this industry slowdown. Leading independent broker-dealer LPL Financial Holdings Inc. (NASDAQ:LPLA) was responsible for most of the remaining relative losses in the category. Expectations for faster interest rate cuts weighed on the stock since LPL earns less interest income on client cash as rates fall. However, the market’s long term rate forecast was stable, leaving the company’s earnings potential unchanged. LPL is also digesting a sizable acquisition of Commonwealth Financial Network, an independent broker-dealer that caters to affluent investors. Although the deal should drive stronger growth over time, it currently offers limited near-term earnings upside and requires significant management attention to ensure a successful integration. While investor sentiment has cooled given the lack of near-term catalysts and expectations for lower rates, we believe LPL’s long-term fundamentals and earnings power remain intact.”

LPL Financial Holdings Inc. (NASDAQ:LPLA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 61 hedge fund portfolios held LPL Financial Holdings Inc. (NASDAQ:LPLA) at the end of the second quarter, compared to 63 in the previous quarter. While we acknowledge the risk and potential of LPL Financial Holdings Inc. (NASDAQ:LPLA) 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 LPL Financial Holdings Inc. (NASDAQ:LPLA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered LPL Financial Holdings Inc. (NASDAQ:LPLA) and shared Artisan Mid Cap 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.