Baron Funds, an investment management company, released its “Baron Focused Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund delivered strong results in the third quarter, appreciating 4.83% (Institutional Shares); however, the performance underperformed the Russell 2500 Growth Index’s (the Benchmark) 10.73% gain. The fund’s underperformance stemmed from concerns over a slowdown in economic growth affecting the fund’s more economically sensitive Consumer Discretionary stocks. Furthermore, the rise in competitive pressures has adversely affected the valuations of a few of its holdings. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Baron Focused Growth Fund highlighted stocks such as FactSet Research Systems Inc. (NYSE:FDS). FactSet Research Systems Inc. (NYSE:FDS) is a financial data company that provides integrated financial information and analytical applications for the investment community. The one-month return of FactSet Research Systems Inc. (NYSE:FDS) was -6.00%, and its shares lost 44.70% of their value over the last 52 weeks. On November 4, 2025, FactSet Research Systems Inc. (NYSE:FDS) stock closed at $264.58 per share, with a market capitalization of $9.901 billion.
Baron Focused Growth Fund stated the following regarding FactSet Research Systems Inc. (NYSE:FDS) in its third quarter 2025 investor letter:
“FactSet Research Systems Inc. (NYSE:FDS) is a leading provider of investment management tools. Shares fell during the quarter due to a combination of industry-wide concerns about AI, uncertainty surrounding the ongoing CEO transition (which prompted a more conservative preliminary fiscal 2026 outlook), and cautious commentary from several financial data and software peers. The company nevertheless reported solid fiscal fourth-quarter 2025 earnings results, its best quarter ever for new sales, and discussed at length how AI is benefiting the business. We retain long-term conviction in FactSet given its large addressable market, strong execution across both new product development and financial results, and robust free cash flow generation.”
FactSet Research Systems Inc. (NYSE:FDS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 36 hedge fund portfolios held FactSet Research Systems Inc. (NYSE:FDS) at the end of the second quarter, up from 29 in the previous quarter. In the fourth quarter of fiscal 2025, FactSet Research Systems Inc. (NYSE:FDS) revenues increased 6.2% year-over-year, reaching $597 million. While we acknowledge the potential of FactSet Research Systems Inc. (NYSE:FDS) 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.
