Core Insights - Baron Fifth Avenue Growth Fund gained 5.7% in Q3 2025, underperforming the Russell 1000 Growth Index (10.5%) and the S&P 500 Index (8.1%) [2] - Year-to-date, the Fund is up 14.4%, compared to 17.2% and 14.8% for its benchmarks [2] Top Contributors to Performance - NVIDIA Corporation's shares rose 18.1% due to its strong position in AI infrastructure, with a long-term total addressable market (TAM) expansion from $1 trillion to between $3 and $4 trillion [3] - Shopify Inc. saw a 28.6% increase in shares, driven by a 30% year-over-year revenue growth and a 29% increase in gross merchandise volume (GMV) [4][5] - Tesla, Inc. shares increased by 40.0%, supported by record delivery volumes, renewed investor confidence in leadership, and advancements in AI initiatives [6] Top Detractors from Performance - The Trade Desk's shares declined 31.9% due to in-line earnings and competitive pressures, particularly from Amazon's entry into the market [7] - Intuitive Surgical, Inc. shares fell 17.7% as system placements in the U.S. did not meet expectations, compounded by financial pressures on hospital customers [8] - MercadoLibre, Inc. shares decreased by 10.6% due to macroeconomic pressures in Argentina and increased competition from Amazon, despite strong quarterly results [9] Recent Activity - The Fund initiated a small investment in Figma and added to existing holdings in KKR, Alphabet, Taiwan Semiconductor, and CrowdStrike, funded by reducing positions in seven other holdings [10]

Core Insights - GitLab has developed a comprehensive AI-native DevSecOps platform that integrates code creation, testing, and security into a single automated environment, enhancing efficiency and security for enterprises [1] - The company is experiencing consistent business growth, with fiscal Q3 revenue estimates at $238.61 million, reflecting a 21.7% year-over-year increase, and a robust enterprise adoption with a 20% increase in high-value customers [2] - GitLab's future growth is contingent on effectively scaling its DevSecOps capabilities, particularly through the Duo Agent Platform and partnerships with major cloud providers [3] Business Expansion - GitLab's fiscal Q3 revenue is projected at $238.61 million, indicating a 21.7% increase year-over-year [2][7] - The number of customers generating over $100,000 in annual recurring revenue is expected to reach 1,372, a 20% increase year-over-year, supported by a dollar-based net retention rate of 120% [2] Competitive Landscape - GitLab faces significant competition, particularly from Microsoft, which is enhancing its offerings through GitHub and Azure DevOps, and from Atlassian, which is expanding its influence with tools like Jira and Bitbucket [4] - The competitive environment is intensifying as both Microsoft and Atlassian integrate advanced security features into their platforms [4] Valuation and Stock Performance - GitLab's shares have declined by 17.6% year-to-date, contrasting with a 26.9% return in the broader Zacks Computer & Technology sector [5] - The stock is trading at a forward Price/Sales ratio of 7.13, higher than the sector average of 6.88, indicating a premium valuation [8] - The Zacks Consensus Estimate for fiscal 2026 earnings is 83 cents per share, reflecting a 12.16% year-over-year increase [10]

Company Overview - GitLab (GTLB) operates a comprehensive software platform that facilitates project management throughout its entire life cycle, including code management, project management, and process automation [1] Investment Perspective - The analysis focuses on high-quality companies facing short-term challenges and misunderstood narratives, with an emphasis on event-driven strategies [1]

Core Viewpoint - BAE Systems, Britain's largest defense company, anticipates growth in operating profit driven by sustained demand, particularly from Turkey for Typhoon aircraft and Norway for Type 26 frigates [1] Group 1 - The company reported strong order inflows, indicating robust market demand [1] - Orders from Turkey and Norway are significant contributors to the company's positive outlook [1] - The forecast for growth in operating profit reflects confidence in the defense sector's resilience [1]

Core Insights - GitLab (GTLB) shares have increased by 17.8% over the past three months, outperforming the broader Zacks Computer & Technology sector's growth of 8.5% and the Zacks Internet - Software industry's decline of 12.9% [1][9] - The surge in GitLab's stock reflects heightened investor confidence in its AI-native DevSecOps platform, which is seeing accelerating customer adoption and an expanding market opportunity due to enterprise AI transformation [2][5] GitLab's Strategic Positioning - GitLab is establishing itself as a leader in AI-native DevSecOps, with its Duo Agent Platform facilitating integrated software development across various environments [5][10] - The platform's AI-orchestrated architecture supports human-AI collaboration throughout the software lifecycle, enhancing flexibility and avoiding vendor lock-in [7][10] Financial Performance and Growth Projections - The Zacks Consensus Estimate for GitLab's fiscal 2026 revenues is $940.15 million, indicating a year-over-year growth of 32.12% [6][14] - The fiscal third-quarter Remaining Performance Obligation is estimated at $1.07 billion, reflecting a 31.5% year-over-year increase, indicating deepening enterprise engagement [11] Valuation and Market Position - GitLab's stock trades at a forward price-to-sales multiple of 7.09X, higher than the sub-industry average of 4.95X and the sector average of 6.75X, suggesting strong growth prospects [12][14] - The Zacks Consensus Estimate for fiscal 2026 earnings is 83 cents per share, indicating a year-over-year growth of 12.16% [14] Competitive Advantages - GitLab's cloud-neutral strategy allows seamless deployment across major cloud platforms, enhancing its competitive position as enterprises adopt hybrid and multi-cloud architectures [11][16] - The company's focus on SaaS and Dedicated offerings is driving recurring revenue and improving customer engagement, particularly in regulated industries [10][15]

Company Overview - Nutanix (NTNX) is a networking IT services company with a market cap of $18 billion [2] - GitLab (GTLB) is another tech name with a market cap of $8 billion [11] Financial Performance - Nutanix - Nutanix has a strong buy rating with growth divergence [1] - The company has beaten earnings estimates for the last four quarters, averaging 20% over the past year [4] - Topline growth is expected to be 15% this fiscal year and 14% next fiscal year, reaching $3 billion in sales [5][6] - Operating margins have increased from 4.4% to 6.4% to 8% over the last three quarters [7] Financial Performance - GitLab - GitLab also has a strong buy rating with growth divergence [11] - The company is beating earnings estimates handily, with some seasonality [12][13] - Revenue is expected to grow 23-24% next year, reaching $1.13 billion, with 20% topline growth [14] - Operating margins are moving from negative to positive [15] Valuation - Nutanix has a forward earnings multiple of 36 times [2][6] - GitLab has a high forward earnings multiple of 58 times, but is growing at about 30% [14][15] - GitLab's price to sales is 930% [15] Market Dynamics and Strategy - There is speculative M&A interest around Nutanix [3][11] - GitLab's earnings estimates are moving higher, indicating good margin expansion [18]

Core Insights - The AI-driven bull run that began in 2023 and 2024 continues into 2025, with AI infrastructure developers poised for significant growth [1] - Despite the overall positive trend, several AI stocks have underperformed in 2025, presenting potential growth opportunities [2] Company Summaries Five9 Inc. (FIVN) - Five9 is a contact center software solutions provider benefiting from increased subscription revenues and enterprise AI traction [4][9] - The company offers a virtual contact center cloud platform with applications for customer service, sales, and marketing [5] - FIVN's expected revenue and earnings growth rates for the current year are 10.6% and 16.6%, respectively, with a 4.3% improvement in earnings estimates over the last 90 days [9] TaskUs Inc. (TASK) - TaskUs provides outsourced digital services across various sectors, including social media and e-commerce [11] - The company has formed strategic partnerships to enhance its agentic AI consulting services, driving double-digit growth [12][13] - TASK's expected revenue and earnings growth rates for the current year are 17.8% and 16.3%, respectively, with a 4.2% improvement in earnings estimates over the last 60 days [13] Workday Inc. (WDAY) - Workday's diversified product portfolio and cloud-based business model are key growth drivers, supported by significant investments [15][16] - The company has strong customer wins across various sectors, contributing to its revenue growth [16] - WDAY's expected revenue and earnings growth rates for the current year are 12.7% and 21.1%, respectively, with a 0.3% improvement in earnings estimates over the last 60 days [17] GitLab Inc. (GTLB) - GitLab offers a DevOps platform that enhances visibility and control over the DevOps lifecycle, with significant innovations in its product portfolio [18] - The introduction of GitLab Duo Workflow, a secure agentic AI, is expected to expand its market presence [19] - GTLB's expected revenue and earnings growth rates for the current year are 23.8% and 12.2%, respectively, with a notable 10.7% improvement in earnings estimates over the last 60 days [19] BILL Holdings Inc. (BILL) - BILL Holdings focuses on AI-enabled financial software for small and medium businesses, benefiting from a growing client base [21][22] - The company is enhancing customer experience through its AI-powered financial operations platform [22] - BILL's expected revenue and earnings growth rates for the current year are 10.5% and -3.2%, respectively, with a 0.5% improvement in earnings estimates over the last 30 days [23]

Core Viewpoint - The article suggests that there are opportunities in undervalued stocks that are mispriced by the market as October begins [1]. Group 1 - The article encourages readers to consider joining a service that focuses on identifying these undervalued stocks [1].

Core Viewpoint - GitLab Inc. (NASDAQ:GTLB) has seen a significant increase in share prices, rising by 10.6% to $48.27, driven by acquisition interest from DataDog Inc. [1][2] Company Performance - GitLab's share price surged due to reports of a potential acquisition by DataDog, with an offer price speculated to be around $60 per share [2] - The company currently has 50 million registered users and claims that over 50% of Fortune 100 companies utilize its platform for software security [4] Company Overview - GitLab is an AI-powered Development, Security, and Operations platform that enhances developer productivity, operational efficiency, and reduces security risks [3]

Core Insights - GitLab's stock rose by 10.6% following speculation of a takeover bid from Datadog at $60 per share, but the stock is considered unattractive at its current price of approximately $48 due to high valuation relative to fundamentals [2][11] Financial Performance - GitLab's revenues have grown significantly, with a 29.0% increase over the last 12 months, rising from $665 million to $858 million, and an average growth rate of 37.4% over the past three years [7] - The company has a price-to-sales (P/S) ratio of 9.1, compared to 3.2 for the S&P 500, and a price-to-free cash flow (P/FCF) ratio of 217.4 versus 20.7 for the S&P 500 [7] - GitLab's operating income over the past four quarters was -$101 million, resulting in an operating margin of -11.8%, while the S&P 500 has an operating margin of 18.6% [13] - The net income for GitLab was -$9.7 million, indicating a net income margin of -1.1%, compared to 12.7% for the S&P 500 [13] Financial Stability - GitLab's balance sheet is robust, with no debt and a market capitalization of $8.0 billion, resulting in a debt-to-equity ratio of 0.0% [13] - Cash and cash equivalents amount to $1.2 billion, constituting 77.8% of total assets of $1.5 billion, compared to 7.0% for the S&P 500 [13] Market Resilience - GitLab's stock has underperformed the S&P 500 during recent downturns, with a decline of 79.5% from its peak of $130.88 on November 8, 2021, to $26.77 on May 4, 2023, while the S&P 500 experienced a peak-to-trough drop of 25.4% [14] - The stock has not yet returned to its pre-crisis high, with its highest value since then being $77.60 on February 11, 2024 [14] Overall Assessment - GitLab's overall operating and financial condition is assessed as moderate, with very strong growth, very weak profitability, very strong financial stability, and very weak downturn resilience [14]