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Baron Fund, an investment management company, released its Q4 2025 letter for “Baron Small Cap Fund”. A copy of the letter can be downloaded here. The market extended its positive trends in the fourth quarter. The Baron Small Cap Fund was down 1.56% in the quarter compared to 1.22% gain for the Russell 2000 Growth Index. The fund returned (0.66)% in 2025, trailing the index by 13.67 percentage points. The yearly performance was weak both on an absolute and a relative basis. Large-cap growth stocks led the market for the third consecutive year, with concentrated leadership. Heading into 2026, the firm expects better growth ahead for small caps given the solid setup. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Baron Small Cap Fund highlighted Vertiv Holdings Co (NYSE:VRT) as one of its leading contributors. Vertiv Holdings Co (NYSE:VRT) is a critical infrastructure solutions provider for data centers, communication networks, and commercial and industrial environments. On February 6, 2026, Vertiv Holdings Co (NYSE:VRT) stock closed at $195.58 per share. One-month return of Vertiv Holdings Co (NYSE:VRT) was 15.03%, and its shares are up 55.52% over the past twelve months. Vertiv Holdings Co (NYSE:VRT) has a market capitalization of $74.778 billion.
Baron Small Cap Fund stated the following regarding Vertiv Holdings Co (NYSE:VRT) in its fourth quarter 2025 investor letter:
“Vertiv Holdings Co (NYSE:VRT) is a leading provider of critical digital infrastructure solutions for data centers, communication networks, and commercial and industrial environments, with one of the broadest offerings in electrical and thermal management equipment and services within the data center infrastructure industry. Shares rose during the quarter following robust financial results (+29% organic revenue growth!) and the announcement of a $1 billion accretive acquisition that further differentiates Vertiv’s service offerings. We believe Vertiv is well positioned for growth over the next several years, supported by its broad product portfolio, unique service capabilities, and role as a preferred solutions provider to leading chip and hyperscale companies. The stock has been a huge winner over the last few years, but valuation remains reasonable on our forward estimates which embed continued strong growth, so we still hold a large position.”
Vertiv Holdings Co (NYSE:VRT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 102 hedge fund portfolios held Vertiv Holdings Co (NYSE:VRT) at the end of the third quarter, compared to 104 in the previous quarter. While we acknowledge the potential of Vertiv Holdings Co (NYSE:VRT) 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.