Baron Asset Strategy

Space Exploration Technologies Corp. (SpaceX) designs, manufactures, and launches rockets, satellites, and spacecrafts. Its ultimate goal is to make humanity multi-planetary. Products include reusable orbital launch offerings and a broadband service leveraging its satellite constellation, Starlink.
We believe SpaceX will continue to drive down the cost of space launches and capture market share with its unique, reliable, and improving reusable launch capabilities. As costs decline, we also expect demand for access to space to increase. By leveraging its launch cost leadership, vertical integration, and innovative design approach, SpaceX has an advantage in building and operating its rapidly expanding satellite-based broadband services, creating an even more attractive growth profile for the company.

X.AI Holdings Corp. (XAICOM.R) was formed in early 2025 through the merger of X (formerly Twitter) and xAI, an AI company founded by Elon Musk in March 2023 with the mission to "understand the true nature of the universe."
This strategic union pairs xAI's large language models with X's real-time data and worldwide distribution, accelerating AI development while giving X an opportunity to modernize the platform by replacing legacy code with AI-driven tools. Shortly after its founding, xAI released its AI model, Grok, which swiftly emerged as a top-tier contender. Fueling Grok’s performance was the rapid deployment of xAI's data centers: Colossus 1 became operational in just 122 days with 100,000 GPUs, while Colossus 2's first 100,000 GPUs deployed even faster, positioning xAI to pioneer a 1-gigawatt training facility. The upcoming 5th version of Grok will use Colossus 2’s expanded resources and is expected to mark further improvement in the model's capabilities. Such early results demonstrate xAI’s innovation prowess and its prospects for enduring leadership in the highly competitive AI field. 

IDEXX Laboratories, Inc. (IDXX) is the leading provider of diagnostics to the veterinary industry.
IDEXX benefits from secular growth in pet-related spending driven by a strengthening human–animal bond, favorable demographics, increased use of diagnostics, and a greater focus on preventative care. We think IDEXX offers the best diagnostics menu in the industry, which it improves by investing significantly more in R&D each year than its competitors. Its products are sold through a razor-razorblade model, resulting in high customer retention and attractive incremental margins. IDEXX generates strong cash flow, which it has returned to shareholders via share repurchases.

Amphenol Corporation (APH) is one of the world's largest providers of high-technology interconnect, sensor, and antenna solutions.
Amphenol has a strong history of shareholder value creation. The company benefits from its diverse end-market exposure and decentralized operating culture, which support balanced performance across economic and market cycles. Amphenol creates value by deploying around 50% of cash flow toward acquisitions in the fragmented sensor and connector space and returning the other 50% to shareholders through dividends and share buybacks. We think the secular trend of electronification is a major tailwind for Amphenol.

Guidewire Software, Inc. (GWRE) is a leading provider of core systems software to the global property and casualty (P&C) insurance industry.
Guidewire is a small player in a vast addressable market and benefits from P&C insurers’ need to upgrade 30-year-old systems. The company offers best-in-class functionality, as evidenced by its growing installed base and near-100% retention rates. After a multi-year transition period, we think Guidewire’s cloud migration is largely complete, and we expect accelerating revenue, expanding margins, and improving free cash flow over the next several years. We believe recent M&A in the vertical software space supports a meaningful value creation opportunity for shareholders.

Arch Capital Group Ltd. (ACGL) is a Bermuda-based insurance company providing property and casualty insurance, reinsurance, and mortgage insurance.
Arch is led by an experienced management team with a successful track record across insurance cycles. The company excels at underwriting specialized policies and can nimbly shift its business mix to target the most profitable lines as market conditions change. Operating in a large global market, Arch benefits from favorable pricing trends across many of its product lines. Management has demonstrated strong underwriting discipline and capital stewardship, allowing Arch to maintain industry-leading returns on equity with less volatility.

Gartner, Inc. (IT) is the leading independent provider of research and advisory services for IT, HR, sales, finance, and marketing leaders.
Gartner has a vast addressable market, which management estimates exceeds $70 billion annually, implying a penetration rate of less than 3%. IT is rapidly changing and growing in strategic importance, leading users to turn to third-party providers for insight into trends. Gartner enjoys retention rates of more than 100%, driven by the low price of its research relative to value. We think consistent execution in Global Technology Sales and improvements in Global Business Sales will help accelerate Research growth into the low double digits.

Verisk Analytics, Inc. (VRSK) provides risk information to the insurance industry, helping companies better understand and manage risks while optimizing decision-making processes.
We believe Verisk holds a unique competitive position. The company is investing to expand its product set in insurance and has divested its financial services and energy segments. We think this pure-play focus on insurance offers an attractive financial profile with mid- to high-single-digit organic growth, robust margins (with room for expansion), and strong free cash flow generation.

CoStar Group, Inc. (CSGP) is the leading provider of information and marketing services to the commercial real estate industry.
CoStar has built a proprietary database through data collection over a 20-year period, creating high barriers to entry. We think CoStar's suite should grow at mid-teens rates, and we believe its Loopnet marketing platform can grow even faster. The company's Apartments.com platform is the dominant multi-family internet listing service and should grow revenue by more than 20%. CoStar is starting to expand into residential, creating additional significant growth opportunities. Strong cash generation and a solid balance sheet also provide meaningful M&A optionality.

Mettler-Toledo International Inc. (MTD) is a leading provider of precision instruments and services for customers in the life sciences, food, and chemical industries, among others.  
Mettler-Toledo has a track record of consistent growth. The company has strong brand recognition, customer diversification, pricing power, and margin expansion opportunities. We think the business has attractive financial characteristics, including high returns on capital, minimal capital requirements, and solid free cash flow generation, which it uses to repurchase its stock. We believe the management team is an excellent steward of capital and skilled at developing sales and marketing initiatives to enhance growth.

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