Baron Funds, an investment management company, released its “Baron Technology Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Market trends are often driven by sentiment in addition to fundamental elements, and the first quarter of 2025 was a clear example of this. January saw a strong performance for the Fund, driven by investor excitement around long-term growth trends in AI. Optimism was fueled by expectations of the new Trump administration’s policies to accelerate economic growth. However, by mid-February, fears of tariffs, a potential trade war, and geopolitical shifts reversed market gains, leading to significant volatility. In the first quarter, the fund fell 14.80% (Institutional Shares), underperforming an 11.64% decline for the MSCI ACWI Information Technology Index (the Benchmark) and a 4.27% decline for the S&P 500 index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Baron Technology Fund highlighted stocks such as Atlassian Corporation (NASDAQ:TEAM). Atlassian Corporation (NASDAQ:TEAM) is a company that designs, develops, licenses, and maintains various software products. The one-month return of Atlassian Corporation (NASDAQ:TEAM) was 7.96%, and its shares gained 21.55% of their value over the last 52 weeks. On May 12, 2025, Atlassian Corporation (NASDAQ:TEAM) stock closed at $223.75 per share with a market capitalization of $58.9 billion.
Baron Technology Fund stated the following regarding Atlassian Corporation (NASDAQ:TEAM) in its Q1 2025 investor letter:
“We added to the Fund’s position in Atlassian Corporation (NASDAQ:TEAM), a mission driven software company redefining how modern teams collaborate, build, and support software. Atlassian is best known for its developer tools – Jira, Confluence, and Jira Service Management – but we believe it is entering a new phase of platform growth driven by AI, deeper enterprise monetization, and a powerful cloud migration cycle. Despite a roughly $60 billion market cap and over 300,000 customers, the company’s long-term opportunity remains underappreciated. Fewer than 600 customers today generate over $1 million in annual contract value, suggesting substantial whitespace across the installed base. As Atlassian moves upmarket and transforms into a platform powering the full software development lifecycle, we believe this can be a multi-year compounder. Our thesis is premised on the following drivers:
1.AI-Led Product Reinvention: Atlassian is embedding AI deeply across its product suite as a core part of the user experience. Its new AI platform, Rovo, acts as a connective tissue across Atlassian tools, providing semantic search, intelligent summarization, auto-generated documentation, and proactive support-ticket triage. Combined with Atlassian Intelligence, which powers task automation and decision support, the company is delivering tangible productivity gains to both technical and non-technical users. While Rovo is still early, it has the potential to transform how teams discover knowledge, coordinate work, and automate support – making Atlassian a true AI-native enterprise software platform. We expect monetization scale as AI capabilities and consumption expands, particularly within large enterprises…” (Click here to read the full text)
A team of software developers working together in an agile environment.
Atlassian Corporation (NASDAQ:TEAM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 75 hedge fund portfolios held Atlassian Corporation (NASDAQ:TEAM) at the end of the fourth quarter compared to 44 in the third quarter. Atlassian Corporation (NASDAQ:TEAM) generated Q3 2025 revenue of $1.4 billion, representing 14% year-over-year increase. While we acknowledge the potential of Atlassian Corporation (NASDAQ:TEAM) 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 cheapest AI stock.
In another article, we covered Atlassian Corporation (NASDAQ:TEAM) and shared the list of top stocks in Ken Griffin’s portfolio to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 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.
