Soumya Eswaran
4 min read
In This Article:
Baron Funds, an investment management company, released its “Baron Technology Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Market trends are often driven by sentiment in addition to fundamental elements, and the first quarter of 2025 was a clear example of this. January saw a strong performance for the Fund, driven by investor excitement around long-term growth trends in AI. Optimism was fueled by expectations of the new Trump administration's policies to accelerate economic growth. However, by mid-February, fears of tariffs, a potential trade war, and geopolitical shifts reversed market gains, leading to significant volatility. In the first quarter, the fund fell 14.80% (Institutional Shares), underperforming an 11.64% decline for the MSCI ACWI Information Technology Index (the Benchmark) and a 4.27% decline for the S&P 500 index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Baron Technology Fund highlighted stocks such as Atlassian Corporation (NASDAQ:TEAM). Atlassian Corporation (NASDAQ:TEAM) is a company that designs, develops, licenses, and maintains various software products. The one-month return of Atlassian Corporation (NASDAQ:TEAM) was 7.96%, and its shares gained 21.55% of their value over the last 52 weeks. On May 12, 2025, Atlassian Corporation (NASDAQ:TEAM) stock closed at $223.75 per share with a market capitalization of $58.9 billion.
Baron Technology Fund stated the following regarding Atlassian Corporation (NASDAQ:TEAM) in its Q1 2025 investor letter:
"We added to the Fund’s position in Atlassian Corporation (NASDAQ:TEAM), a mission driven software company redefining how modern teams collaborate, build, and support software. Atlassian is best known for its developer tools – Jira, Confluence, and Jira Service Management – but we believe it is entering a new phase of platform growth driven by AI, deeper enterprise monetization, and a powerful cloud migration cycle. Despite a roughly $60 billion market cap and over 300,000 customers, the company’s long-term opportunity remains underappreciated. Fewer than 600 customers today generate over $1 million in annual contract value, suggesting substantial whitespace across the installed base. As Atlassian moves upmarket and transforms into a platform powering the full software development lifecycle, we believe this can be a multi-year compounder. Our thesis is premised on the following drivers:
