Baron Capital, an investment management firm, released its Q4 2025 investor letter for its “Baron Opportunity Fund.” A copy of the letter can be downloaded here. The Fund returned 4.63% (institutional stocks) in the fourth quarter of 2025, outperforming the 1.14% gain of the Russell 3000 Growth Index (the benchmark) and the 2.66% return of the S&P 500 Index. The Fund appreciated 19.73% over the full year, outperforming the benchmark’s 18.15% and the S&P. A turbulent year ended with modest improvements in the fourth quarter. Moderation in tariff impacts, strong corporate earnings and continued monetary easing supported fourth-quarter earnings. The Fund’s management focuses on prioritizing important secular growth trends, including artificial intelligence, space exploration and technology, autonomous transportation, robotics, digital commerce, media, finance, advanced therapies and minimally invasive surgery that disrupt businesses and create profitable long-term growth opportunities. This approach led to the Fund’s outperformance during the year. Also, check out the Fund’s top five holdings to learn your best picks in 2025.
In its Q4 2025 investor letter, Baron Opportunity Fund highlighted Axon Enterprise, Inc. (NASDAQ:AXON) as one of its new additions to the portfolio. Axon Enterprise, Inc. (NASDAQ:AXON) is a public safety technology company focused on the development of connected law enforcement products and services, including Tasers, body cameras, drones and other hardware solutions. On March 17, 2026, Axon Enterprise, Inc. (NASDAQ:AXON) stock closed at $506.57 per share. Axon Enterprise, Inc. (NASDAQ:AXON)’s monthly performance was 17.77% and its stock lost 10.83% in the past 52 weeks. Axon Enterprise, Inc. (NASDAQ:AXON) has a market capitalization of $40.73 billion.
Baron Opportunity Fund stated the following regarding Axon Enterprise, Inc. (NASDAQ:AXON) in its Q4 2025 investor letter:
“We recently initiated a position in Axon Enterprise, Inc. (NASDAQ:AXON), a leading public safety technology company offering Taser, body camera, drones and other hardware solutions along with robust cloud, digital evidence management, real-time operations and AI-powered software offerings. Founded by current CEO Rick Smith in 1993, Axon began as a Taser company and now has a near monopoly on the product among law enforcement officers nationwide. Step by step, Rick and the team developed additional solutions and combined them into different packages that, through a world-class sales operation created and driven by President Josh Isner, are now sold nationwide and increasingly internationally. Despite growing to over $2 billion in revenue by 2024, the company is only scratching the surface of its massive $159 billion addressable market that continues to grow as more products are introduced. Axon competes with companies in specific verticals, but there is no singular competitor that can match the public safety ecosystem the team has built, which it modeled after Apple’s incomparable iOS ecosystem. For example, the team introduced a revolutionary AI product called Draft One, a software solution that leverages generative AI to draft high-quality police report narratives in seconds, based on automatically transcribed audio from a body camera. Taking all the data from Axon body cameras, Draft One is uniquely positioned to help officers save around 40% of their time. The company is using its position as a dominant provider of policing solutions to use data that other players do not have access to and dramatically improve officer efficiency. Axon is a special company, led by a visionary founder and a strong management team, constantly moving forward to drive the wheel faster. “We see lasting 25%+ revenue growth for the foreseeable future, with margins increasing as software grows to become a larger percentage of the total revenue mix.”
