What Makes Masimo Corporation (MASI) a Good Investment?

Baron Funds, an investment management company, released its “Baron Health Care Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund declined 5.06% (Institutional Shares) in the quarter, against a challenging backdrop for the broader Health Care sector, compared to a 6.19% decline for the Russell 3000 Health Care Index (benchmark) and a 10.99% gain for the Russell 3000 Index (the Index). In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as Masimo Corporation (NASDAQ:MASI). Incorporated in 1989, Masimo Corporation (NASDAQ:MASI) is a medical technology company that provides various patient monitoring technologies, automation, and connectivity solutions. The one-month return of Masimo Corporation (NASDAQ:MASI) was -6.89%, and its shares gained 45.36% of their value over the last 52 weeks. On July 30, 2025, Masimo Corporation (NASDAQ:MASI) stock closed at $156.02 per share, with a market capitalization of $8.459 billion.

Baron Health Care Fund stated the following regarding Masimo Corporation (NASDAQ:MASI) in its second quarter 2025 investor letter:

“We added to our position in Masimo Corporation (NASDAQ:MASI), a medical device company that manufactures non-invasive patient monitoring technologies, such as pulse oximetry for measuring blood oxygen levels of patients in the hospital. The company finalized the divestiture of its consumer audio business, which had been a distraction from their core health care business. The company plans to prioritize share repurchases with the proceeds from the sale. The trade war and tariff uncertainty has been an overhang, given Masimo manufactures products in Mexico, Malaysia, and China, but there is reason to be optimistic about de-escalation and trade deals. After meeting with new CEO Katie Szyman, we feel confident in her vision which is focused on achieving commercial excellence, bringing Masimo’s AI technology to the hospital, and expanding the company’s overall patient monitoring footprint within the hospital. We think the core health care business can continue to grow in the high single digits on the top line, and cost rationalization and disciplined spending should enable the company to more than double EPS within five years.”

A team of doctors and nurses in the operating room, utilizing a variety of Masimo’s medical technology.

Masimo Corporation (NASDAQ:MASI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Masimo Corporation (NASDAQ:MASI) at the end of the first quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of Masimo Corporation (NASDAQ:MASI) 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 MASIMO CORPORATION (NASDAQ:MASI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Masimo Corporation (NASDAQ:MASI) and shared Baron Health Care Fund’s views on the company in the previous quarter. 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.