Baron Funds, an investment management company, published its Q3 2025 “Baron Technology Fund” investor letter. A copy of the letter can be downloaded here. US stocks rose in the third quarter after the previous quarter. In the third quarter, the fund returned 5.89% (institutional stocks), but underperformed the 12.76% return of the MSCI ACWI Information Technology Index (the benchmark), the 8.94% return of the Invesco QQQ Trust (the QQQ), and the 8.12% return of the S&P 500 Index. Also, check out the fund’s top five holdings for your best picks in 2025.
In its Q3 2025 investor letter, Baron Technology Fund highlighted stocks like Arista Networks, Inc. (NYSE:ANET). Arista Networks, Inc. (NYSE:ANET) is a technology company focused on the development and distribution of data-driven client-to-cloud networking solutions. Arista Networks Inc (NYSE:ANET)’s monthly performance was -1.10% and its shares gained 38.80% of its value in the last 52 weeks. On November 10, 2025, Arista Networks Inc. (NYSE:ANET) stock closed at $137.26 per share, with a market capitalization of $172.849 million.
Baron Technology Fund stated the following regarding Arista Networks Inc (NYSE:ANET) in its Q3 2025 investor letter:
“This quarter, we reestablished a position in Arista Networks Inc. (NYSE:ANET), a leading provider of high-performance networking solutions for data centers, cloud providers and enterprises. Arista’s advanced switching and routing platforms, powered by its proprietary software, offer enhanced scalability, automation and flexibility. The company generates revenue through the sale of hardware along with software and post-contract support services, serving major cloud players such as Microsoft, Meta and Oracle, along with a growing range of enterprise customers. We are witnessing unprecedented development of AI infrastructure, where networks are becoming an increasingly critical component. While NVIDIA offers a comprehensive technology stack for AI data centers, Arista stands out as the leading networking company with best-in-class Ethernet solutions. Its products not only interconnect servers within data centers and link multiple data centers, but will also extend to emerging architectures that connect AI accelerators within the rack. “We believe Arista is well positioned to capture a significant share of the data center networking stack as AI cluster builders prioritize performance optimization and vendor diversification.”
Arista Networks Inc (NYSE:ANET) isn’t on our list of the 30 most popular stocks among hedge funds. According to our database, Arista Networks Inc (NYSE:ANET) had 81 hedge fund portfolios at the end of the second quarter, up from 75 in the previous quarter. In the third quarter of 2025, Arista Networks Inc (NYSE:ANET) reported revenue of $2.3 billion, up 27.5% year-over-year, exceeding expectations. While we recognize the potential of Arista Networks Inc (NYSE:ANET) as an investment, we believe certain AI stocks offer greater growth potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.