Brown Brothers Harriman & Co., a global financial services firm, released its “The BBH Select Series – Mid Cap Fund” first quarter investor letter. A copy of the same can be downloaded here. The fund fell -6.0% in the first quarter on a total return basis, while the Russell Midcap Index decreased -3.4%. The fund generated an average annual total return of 3.1% since its inception on May 24, 2021, compared to the index’s 4.1% return. Given the increased policy uncertainty and market volatility, many of the firm’s management teams issued cautious 2025 guidance. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its first-quarter 2025 investor letter, The BBH Select Series – Mid Cap Fund highlighted stocks such as Keysight Technologies, Inc. (NYSE:KEYS). Keysight Technologies, Inc. (NYSE:KEYS) is an electronic design and test solutions provider to commercial communications, networking, aerospace, defense and government, automotive, energy, semiconductor, electronics, and education industries. The one-month return of Keysight Technologies, Inc. (NYSE:KEYS) was 3.90%, and its shares gained 21.21% of their value over the last 52 weeks. On June 24, 2025, Keysight Technologies, Inc. (NYSE:KEYS) stock closed at $164.73 per share, with a market capitalization of $28.352 billion.
The BBH Select Series – Mid Cap Fund stated the following regarding Keysight Technologies, Inc. (NYSE:KEYS) in its Q1 2025 investor letter:
“We initiated two new positions in the first quarter in UL Solutions Inc. (ULS) and Keysight Technologies, Inc. (NYSE:KEYS). Keysight is the market leader for test and measurement equipment and software addressing the end markets of communications, electronics, and aerospace and defense. Keysight designs and produces high margin equipment such as oscilloscopes and network analyzers for the generation and precise measurement of electrical and radio wave signals. Keysight has supplemented the core hardware business with design and control software as well as recurring service offerings, which now represent 35% of revenue. Keysight sells into a diverse mix of 30,000 customers including industry leaders such as Qualcomm in wireless communications, Broadcom in wired commu nications, Boeing in aerospace, and Tesla in electronics.
Keysight’s growth is tied to overall research and development spending across the company’s diverse end markets involving electronic or radio wave technology. Key growth drivers include continued implementation of 5G wireless services eventually transitioning to 6G, 800G data center networking to support AI deployments, electric vehicles and autonomous driving functionality, as well as satellite communications and electronic warfare. With these technology tailwinds, Keysight aims to grow revenue at a mid to high single-digit rate. Keysight’s advanced prod ucts earn attractive mid-60% gross margins and 30% operating margins with excellent free cash flow conversion. Management led by CEO Satish Dhanasekaran has effectively balanced profitability and growth while continuing to invest in market-leading capabilities, with free cash flow expected to grow at a low double-digit rate over time. Keysight is well-positioned to produce attractive, high-margin growth as their customers invest to achieve market leadership aided by Keysight’s products.”
A technician examining a complex circuit board in a semiconductor development lab.
Keysight Technologies, Inc. (NYSE:KEYS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held Keysight Technologies, Inc. (NYSE:KEYS) at the end of the first quarter, which was 51 in the previous quarter. In the fiscal second quarter of 2025, Keysight Technologies, Inc. (NYSE:KEYS) achieved revenue of $1.306 billion, surpassing guidance, with a 7% increase reported and an 8% increase on a core basis. While we acknowledge the potential of Keysight Technologies, Inc. (NYSE:KEYS) 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 undervalued AI stock set for massive gains.
In another article, we covered Keysight Technologies, Inc. (NYSE:KEYS) and shared the list of AI stocks on analysts’ radar. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of KEYS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
