What Makes CoStar Group (CSGP) an Investment Bet?

Parnassus Investments, an investment management company, released the “Parnassus Mid Cap Growth Fund” second quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund (Investor Shares) returned 13.29% (net of fees) in the quarter, compared to the Russell Midcap Growth Index’s 18.20% return. Stock selection in the Industrials and Information Technology sectors negatively impacted the performance, while holdings in the Financials sector contributed. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Parnassus Mid Cap Growth Fund highlighted stocks such as CoStar Group, Inc. (NASDAQ:CSGP). CoStar Group, Inc. (NASDAQ:CSGP) is an information, analytics, and online marketplace services provider for commercial and residential property markets. The one-month return of CoStar Group, Inc. (NASDAQ:CSGP) was -6.95%, and its shares gained 12.47% of their value over the last 52 weeks. On September 24, 2025, CoStar Group, Inc. (NASDAQ:CSGP) stock closed at $84.05 per share, with a market capitalization of $35.608 billion.

Parnassus Mid Cap Growth Fund stated the following regarding CoStar Group, Inc. (NASDAQ:CSGP) in its second quarter 2025 investor letter:

“CoStar Group, Inc. (NASDAQ:CSGP), a leading provider of information, analytics and online marketplaces for the real estate industry. As management refocuses on its core businesses, we expect CoStar’s return on capital to improve dramatically, and we believe the stock will follow suit. We reinitiated a position in CoStar, whose proprietary information and analytics platform has durable competitive advantages in the commercial real estate industry. We believe the range of outcomes is favorable as its core business compounds earnings at a double-digit clip and the profitability of its home-buying marketplace Homes.com improves.”

Was Jim Cramer Right About CoStar Group, Inc. (CSGP)?

CoStar Group, Inc. (NASDAQ:CSGP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 59 hedge fund portfolios held CoStar Group, Inc. (NASDAQ:CSGP) at the end of the second quarter, up from 51 in the previous quarter. While we acknowledge the risk and potential of CoStar Group, Inc. (NASDAQ:CSGP) 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 CoStar Group, Inc. (NASDAQ:CSGP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered CoStar Group, Inc. (NASDAQ:CSGP) and shared Baron Asset Fund’s views on the company. 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.