Overview
- The Baron Focused Growth Fund, which reported Monday, fell 4.99% year to date versus a 3.52% decline in the Russell 2500 Growth Index.
- Baron said shifting views on artificial intelligence and uncertainty tied to the conflict in Iran weighed on valuations and near‑term returns.
- Guidewire slid 25.7% and cut performance by 88 basis points, yet Baron said its cloud shift is largely done and expects subscription revenue and margins to rise over time.
- CoStar shares dropped on multiple compression linked to AI worries, though Baron highlighted the company’s data advantages, ongoing Homes.com investment, and potential for future cash flow and buybacks.
- Positive offsets included FIGS, which posted 33% fourth‑quarter revenue growth with higher EBITDA and upbeat 2026 guidance, as well as Choice Hotels, which saw room revenue per available room edge higher and used cash flow for share repurchases.