Baron Capital, an investment management company, released its Q1 2026 investor letter for the “Baron Durable Advantage Fund”. A copy of the letter can be downloaded here. In Q1 2026, Baron Durable Advantage Fund (the Fund) declined 9.0% (Institutional Shares) compared to the 4.3% decline for the S&P 500 Index (the Index), the Fund’s benchmark. The Fund started 2026 with optimism, having posted three consecutive years of strong market returns. However, heightened geopolitical tensions and the subsequent war with Iran drove up oil prices, adversely affecting market dynamics. Two-thirds of the Fund’s relative underperformance was due to sector allocation, with the remaining third attributable to poor stock selection. The letter highlighted durable structural competitive moats. As a long-only investor, the Fund aims to achieve an annualized alpha of 100 to 200 basis points, net of fees, while minimizing permanent capital loss. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In Q1 2026, Baron Durable Advantage Fund increased its holdings in Amphenol Corporation (NYSE:APH). Amphenol Corporation (NYSE:APH) is a leading manufacturer of electrical, electronic, and fiber optic connectors serving a broad range of end markets. On May 13, 2026, Amphenol Corporation (NYSE:APH) closed at $124.64 per share. One-month return of Amphenol Corporation (NYSE:APH) was -16.33%, and its shares gained 44.98% over the past 52 weeks. Amphenol Corporation (NYSE:APH) has a market capitalization of $153.34 billion.
Baron Durable Advantage Fund stated the following regarding Amphenol Corporation (NYSE:APH) in its Q1 2026 investor letter:
“We took advantage of price volatility to add to our position in Amphenol Corporation (NYSE:APH), a leading provider of high-technology interconnect, sensor, and antenna solutions to a broad range of of end markets. Amphenol is benefiting from the AI data center buildout as the leading supplier of high-speed copper interconnects. Its IT datacom segment has been growing rapidly (now around $10 billion revenue run rate), and the recent $10.5 billion CommScope CCS acquisition (closed January 2026) adds fiber optic capabilities, making Amphenol a total solution provider for data center connectivity.”
Amphenol Corporation (NYSE:APH) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 103 hedge fund portfolios held Amphenol Corporation (NYSE:APH) at the end of the fourth quarter, up from 89 in the previous quarter. Amphenol Corporation (NYSE:APH) generated record sales of $7.6 billion in Q1 2026, an increase of 58% year over year in U.S. dollars, 57% in local currency. While we acknowledge the risk and potential of Amphenol Corporation (NYSE:APH) 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 Amphenol Corporation (NYSE:APH) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Amphenol Corporation (NYSE:APH) and shared the list of best aggressive growth stocks to buy according to Wall Street analysts. In addition, please check out our hedge fund investor letters Q1 2026 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.
