Baron Funds, an investment management company, released its “Baron Technology Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. US equities rallied in the third quarter following the previous quarter. In the third quarter, the fund returned 5.89% (Institutional Shares) but underperformed the MSCI ACWI Information Technology Index’s (the Benchmark) 12.76% return, Invesco QQQ Trust’s (the QQQ) 8.94% return, and the S&P 500 index’s 8.12% 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 Technology Fund highlighted stocks such as The Trade Desk, Inc. (NASDAQ:TTD). Headquartered in Ventura, California, The Trade Desk, Inc. (NASDAQ:TTD) is a technology company that offers a self-service cloud-based ad-buying platform. The one-month return of The Trade Desk, Inc. (NASDAQ:TTD) was -14.73%, and its shares lost 67.03% of their value over the last 52 weeks. On November 10, 2025, The Trade Desk, Inc. (NASDAQ:TTD) stock closed at $43.26 per share, with a market capitalization of $20.92 billion.
Baron Technology Fund stated the following regarding The Trade Desk, Inc. (NASDAQ:TTD) in its third quarter 2025 investor letter:
“The Trade Desk, Inc. (NASDAQ:TTD), a leading digital-advertising demand-side platform (DSP), detracted from performance this quarter after reporting results and guidance that fell short of expectations. This frustrated investors amid strength in the broader advertising market and following strong first quarter results that exceeded both Baron and consensus forecasts. We believe several factors contributed to second quarter revenue growth decelerating more than anticipated: (i) a slower-than-anticipated rollout of the company’s new platform, Kokai (which has since re-accelerated); (ii) broad macro uncertainty around tariffs that impacted larger brand advertisers, who appear to have pulled-forward advertising spending into the first quarter in front of the administration’s April tariff roll out; and (iii) the company’s restructuring of sales and account coverage, particularly focused on its largest clients. Importantly, our conversations with industry participants suggest that Amazon’s competing DSP has not yet taken meaningful share from Trade Desk and that most advertiser interest in Amazon appears limited to its exclusive Prime Video inventory. That said, we are closely monitoring Amazon’s push to scale its offering by undercutting Trade Desk on fees and signing new publishing partners like Roku, Netflix, and Spotify. Despite these issues, our research supports our view that Trade Desk remains the product leader in the DSP space and is well positioned to benefit from strengthening brand advertising trends in the second half of 2025. Trade Desk no longer commands a premium valuation, trading more in line with peers and reflecting tempered growth expectations. The company remains financially stout, with over $1.7 billion in cash on its balance sheet, strong free cash flow generation, and the capacity to aggressively repurchase a significant portion of its market cap. We continue to hold our position in Trade Desk, while keeping a close eye on the evolving competitive landscape.”
The Trade Desk, Inc. (NASDAQ:TTD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held The Trade Desk, Inc. (NASDAQ:TTD) at the end of the second quarter, which was 61 in the previous quarter. In the third quarter of 2025, The Trade Desk, Inc. (NASDAQ:TTD) reported revenue of $739 million, representing 18% year-over-year growth. While we acknowledge the risk and potential of The Trade Desk, Inc. (NASDAQ:TTD) 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 The Trade Desk, Inc. (NASDAQ:TTD) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered The Trade Desk, Inc. (NASDAQ:TTD) and shared Columbia Global Technology Growth 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.
