Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund experienced an excellent quarter to end another successful year. The fund increased 11.7% (Institutional Shares) in the fourth quarter compared to a 7.1% gain for the Russell 1000 Growth Index and a 2.4% increase for the S&P 500 Index. For the full year, the fund returned 37.8% compared to 33.4% and 25.0% gains for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.

In its fourth quarter 2024 investor letter, Baron Fifth Avenue Growth Fund emphasized stocks such as GitLab Inc. (NASDAQ:GTLB). GitLab Inc. (NASDAQ:GTLB) develops software for the software development lifecycle. The one-month return of GitLab Inc. (NASDAQ:GTLB) was -5.23%, and its shares lost 13.70% of their value over the last 52 weeks. On February 21, 2025, GitLab Inc. (NASDAQ:GTLB) stock closed at $64.12 per share with a market capitalization of $9.978 billion.

Baron Fifth Avenue Growth Fund stated the following regarding GitLab Inc. (NASDAQ:GTLB) in its Q4 2024 investor letter:

"We added to our position in GitLab Inc. (NASDAQ:GTLB), a leading software development platform. The company continues to perform well with revenue growth of 31% year-on-year while non-GAAP operating margins were up 1,100bps to 13%. While some analysts suggested that GitLab as a laggard in AI, we believe the company is well positioned due to its unique end-to-end platform which gives it a data advantage, enabling agentic AI."

A team of software engineers working together in an open office, developing innovative solutions.

GitLab Inc. (NASDAQ:GTLB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held GitLab Inc. (NASDAQ:GTLB) at the end of the fourth quarter compared to 43 in the third quarter. In the fiscal third quarter of 2025, GitLab Inc.'s (NASDAQ:GTLB) revenue increased 31% year-over-year to $196 million. While we acknowledge the potential of GitLab Inc. (NASDAQ:GTLB) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed GitLab Inc. (NASDAQ:GTLB) and shared the list of software infrastructure stocks outperforming in 2025. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.