Karman Holdings (KRMN) is Benefiting From Increased Defense Spending

Core Insights - Baron Discovery Fund's performance in Q3 2025 showed a year-to-date increase of 10.75%, underperforming the Russell 2000 Growth Index which returned 11.65% [1] - The fund's Q3 return was 2.85%, significantly lagging behind the Index's 12.19% return [1] Company Highlights - Karman Holdings Inc. (NYSE:KRMN) is recognized for its role in designing, testing, manufacturing, and selling mission-critical defense systems [2] - The stock of Karman Holdings Inc. experienced a one-month return of 16.86% and a three-month gain of 65.94%, closing at $85.79 with a market capitalization of $11.352 billion on October 29, 2025 [2] - The company benefits from increased defense spending, particularly in flagship defense programs and emerging segments like hypersonics, positioning itself as a critical supplier in the defense industry [3] - Karman Holdings Inc. boasts margins more than double the industry average due to its focus on technically complex systems for prime contractors [3] Investment Sentiment - Karman Holdings Inc. was held by 21 hedge fund portfolios at the end of Q2 2025, a decrease from 32 in the previous quarter [4] - While Karman Holdings Inc. is viewed as a potential investment, the company is compared unfavorably to certain AI stocks that are believed to offer greater upside potential and lower downside risk [4]