Baron Focused Growth Fund announced its third quarter results.

Baron Funds' Third Quarter Report

Baron Funds, an investment management company, published its investor letter for the third quarter of 2025. The Baron Focused Growth Fund gained 4.83% this quarter; however, this performance fell behind the Russell 2500 Growth Index (10.73%). This situation is explained by the slowdown in economic growth impacting the fund's more economically sensitive Consumer Spending stocks.

Increased competitive pressure also negatively affected the valuations of some stocks. It is recommended to review the fund's report to learn about the top five stocks of 2025.

Shopify Inc. (NASDAQ:SHOP) was one of the standout stocks in the fund’s third quarter investor letter. Shopify Inc. (NASDAQ:SHOP) is a commerce technology company that offers a cloud-based platform to start, grow, and manage businesses. The stock of Shopify experienced a decline of 3.30% over the past month; however, it gained 96.46% over the last 52 weeks. On November 4, 2025, Shopify Inc. (NASDAQ:SHOP) closed at a price of $160.94, with a market capitalization of $210.445 billion.

The letter included the following statements about Shopify Inc. (NASDAQ:SHOP): "Shopify shares increased by 28.8% during this period, contributing 85 basis points to performance. Shopify is a leading provider of cloud-based software in multi-channel commerce. The company achieved a year-on-year revenue growth of 30% in constant currency in the second quarter, reflecting market share gains with 29% growth. The growth was broad-based among Shopify's core e-commerce merchants and was supported by successful expansion. Shopify recorded growth rates of 29%, 42%, and 101% in offline, international, and business-to-business channels, respectively. The shares also benefited from advancements in active commerce highlighted by the partnership with OpenAI. We believe that the maturing product range of the company is becoming increasingly attractive for businesses of all sizes. Since Shopify accounts for less than 2% of the global commerce market, it still has significant growth potential."

Shopify Inc. (NASDAQ:SHOP) is not on the list of the 30 most popular stocks among Hedge Funds. According to our database, at the end of the second quarter, 69 hedge fund portfolios held Shopify Inc. (NASDAQ:SHOP); this number was 77 in the previous quarter. Shopify Inc. generated $2.7 billion in revenue in the second quarter of 2025, reflecting a year-on-year increase of 31%. While we agree with Shopify's investment potential, we believe that certain artificial intelligence stocks have greater upside potential and carry less downside risk.