Baron Fund, an investment management firm, released its Q4 2025 charter for the “Baron Durable Advantage Fund.” A copy of the letter can be downloaded here. The Fund returned 2.6% in the fourth quarter, mirroring the 2.7% return of the S&P 500 Index. The Fund returned 16.6% in 2025, compared with 17.9% for the index and 16.1% gain for the Peer Group, Morningstar Large Growth Category Average. Looking to 2026, in an environment dominated by geopolitics, changing regulatory trends and artificial intelligence, the Fund is focused on investing in high-quality, large-cap companies with strong competitive advantages, proven track records and consistent shareholder returns. Review the Fund’s top five holdings to learn about its key picks for 2025.
In its Q4 2025 investor letter, Baron Durable Advantage Fund highlighted Broadcom Inc. (NASDAQ:AVGO) as a notable contributor. Broadcom Inc. (NASDAQ:AVGO) is a leading semiconductor and infrastructure software solutions company. On February 10, 2026, Broadcom Inc. (NASDAQ:AVGO) stock closed at $340.44 per share. Broadcom Inc. (NASDAQ:AVGO)’s monthly performance was 0.16% and its shares have risen 44.04% in the past twelve months. Broadcom Inc. (NASDAQ:AVGO) has a market capitalization of $1.614 trillion.
Baron Durable Advantage Fund stated the following regarding Broadcom Inc. (NASDAQ:AVGO) in its Q4 2025 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) is a leading fabless semiconductor and enterprise software company, generating approximately 60% of revenue from semiconductors and 40% from software. The company is strategically positioned at the intersection of high-performance AI computing and networking infrastructure, while demonstrating disciplined software execution. Broadcom has extended its leadership in commercial network silicon from the cloud era to the AI era and is considered the most trusted silicon partner for fundamental AI model builders designing custom chips to train cutting-edge models. Shares rose 5.0% in the fourth quarter, ending 2025 up 50.6%, driven by strong AI momentum, with key customer Google continuing its growth and additional large customers entering significant production volume. The company ended its fiscal 2025 with AI revenue growth of 65%, reaching $20 billion (nearly a third of total revenue), and quarterly AI revenue grew 10x over the last 11 quarters. Broadcom also announced a total AI backlog of $73 billion, which is nearly half of the company’s total backlog of $162 billion. It now has 5 XPU (AI accelerator) customers, including Anthropic, which was announced last quarter. Despite strong growth, Broadcom guided AI revenue to accelerate further in fiscal 2026. Additionally, VMware integration is advancing and non-AI semiconductor businesses appear to be bottoming out, which has driven the company’s overall growth to 24% in fiscal 2025 with EBITDA margins of 67%. “We believe Broadcom has a long runway for growth as an enabler of a complete solution, as demand is expected to remain durable in the coming years supported by the development of AI infrastructure.”
