Baron Funds, an investment management company, released investor letters for its Baron Discovery Fund in the first quarter of 2025. A copy of the letter can be downloaded here. In the first quarter, the fund fell 6.17% (institutional stocks), better than -11.12% return on the Russell 2000 Growth Index. The market began strong in February but faded out due to severe Trump tariff regulations, which the market saw as inflation and slowing economic growth. The acceleration of the decline after April 2 has led to concerns about a trade war and a global recession. Also, check the fund’s top five holdings to see its best options for 2025.

Baron Discovery Fund highlighted Kratos Defense & Security Solutions, Inc in its first-quarter 2025 investor letter. (NASDAQ: KTOS) and other stocks. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is a technology company that provides mission-critical products, services and solutions. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) has a one-month return of 10.31%, and its stock has accounted for 62.71% of its value over the past 52 weeks. May 16, 2025, Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) shares closed at $35.21 per share, with a market value of $5.397 billion.

Baron Discovery Fund pointed out about Kratos Defense & Security Solutions, Inc in its 2025 investor letter. (NASDAQ:KTOS) The following content:

“Share Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a disruptive defense technology provider who showed significant advantages in a clear multiple segment after a strong quarterly earnings report and directed a faster baseline growth than baseline growth in fiscal 2026. We believe that Kratos is increasingly capable of accelerating growth, with its ability to promote racing, including growth, including solid motivations of the Department of Defense, and within the numerous power ranges including the Department of Defense, the action is neither there nor numerous motivations, and can gradually increase the motivations of hygiene. Aircraft solutions. The company is strideing forward and is now investing heavily to meet what it believes is very obvious future needs. ”

Technicians in the laboratory conduct research and development of microwave electronic products.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is not among the 30 most popular stocks in hedge funds. According to our database, 21 hedge fund portfolios held Kratos Defense & Security Solutions, Inc at the end of the fourth quarter. (NASDAQ:KTOS), compared to 20 in the third quarter. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) reported revenue of $302.6 million, exceeding its guidance. Although we acknowledge Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) The potential is an investment, but our belief is that AI stocks have greater hope to offer higher returns and do so in a shorter time frame. If you are looking for AI stocks that are as promising as NVIDIA, but whose earnings are trading at less than 5 times the price, check out our report on undervalued AI stocks.