Baron Focused Growth Fund

Space Exploration Technologies Corp. (SPACEX.A) 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.

Tesla, Inc. (TSLA) manufactures electric vehicles, including a sedan, CUV, pickup truck, and semi-truck. The company is also ramping up internal battery cell production, energy solutions, robotics offerings such as full self-driving and humanoids, and renewable energy generation and storage solutions.
We expect Tesla will continue to grow its automotive business as it benefits from the secular adoption of electric vehicles, its vertical integration, technological innovation, and cost advantage. Tesla is also leveraging its core automotive technologies to address the rapidly growing energy storage segment. In addition, Tesla's software and AI expertise is broadening the industrial opportunity to large and profitable revenue avenues that were previously locked in the legacy vehicle architecture, such as autonomous driving, robotics, insurance, and other AI use cases.

IDEXX Laboratories, Inc. (IDXX) is the leading provider of diagnostics to the veterinary industry.
IDEXX has benefited from secular growth spending on pets due to a growing human-animal bond, favorable demographics, increased use of diagnostics, and enhanced focus on preventative care. We think IDEXX has the best menu of diagnostics, which it continuously improves by by investing significantly more in R&D each year than its competitors. The company's products are sold via a razor-razorblade model, which creates high retention rates and incremental margins. IDEXX generates strong cash flow, which it has returned to shareholders via repurchases.

Spotify Technology S.A. (SPOT) is the world's leading music streaming service, with approximately 40% market share. The company monetizes through several tiers of subscriptions, advertising, and miscellaneous a la carte pricing. 
With over 276 million paying subscribers, Spotify has created a two-sided marketplace where creators can monetize their work and consumers can stream music. Longer term, we expect the company to grow to over 1 billion subscribers (from 696 million today) and improve margins materially through advertising, its artist promotions marketplace, audiobooks, and improved cost discipline. We expect Spotify to continually improve its value proposition through additional features like video, and monetize this value through more optimized pricing tiers like Super Premium.

MSCI Inc. (MSCI) provides investment decision support tools to global investment institutions.
We believe MSCI, the de facto standard for measuring global market performance, is positioned to benefit from the continuing development of emerging markets, passive investing, sustainability, and the growth of global financial assets. We believe the company's indexes remain the global standard for cross-border investing and will continue to be selected by institutions when issuing new mandates. Both its index and multi-asset portfolio and risk analytics products are mission critical and deeply embedded in client workflows.

On Holding AG (ONON), a Swiss premium performance sports brand specializing in footwear (roughly 95% of revenue), is one of the fastest-growing scaled athletic wear companies in the world. The company was founded in 2010 and continues to gain market share in the athletic footwear category. 
On is an innovative lifestyle brand blending technical performance with fashion and lifestyle elements to deliver a lineup of footwear, apparel, and accessories. We believe On is still early in its lifecycle as it expands its product line and distribution network. On benefits from strong brand loyalty, its commitment to sustainability, a focus on innovation, and a highly complementary, multi-channel distribution strategy. The sportswear market is a $355 billion-and-growing opportunity, of which On has a small share, implying a long growth runway.

Interactive Brokers Group, Inc. (IBKR) is an automated global electronic broker. The company provides low-cost execution, clearing, and settlement of trades for retail and institutional customers across multiple asset classes and currencies.
Interactive Brokers is gaining share because of its advanced technology, quality of execution, and low trading costs. We expect the company to continue growing rapidly through international expansion and as domestic RIAs depart traditional institutions to launch their own firms. Interactive Brokers' competitive advantage comes from automation through best-in-class software engineering, which enables it to offer industry-low costs to customers. Founder and Chairman Thomas Peterffy is well regarded and is the company's largest shareholder.

X.AI Holdings Corp. (XAICOM.R) is a private company founded by Elon Musk to develop advanced, “truth-seeking” AI models. It acquired X (formerly Twitter) to enhance data, resources, and product integration across the two companies. With a focus on rapid innovation at scale, xAI aims to lead the AI race.
With rising demand for AI-enabled solutions and products, xAI's focused strategy and innovative approach position it to become a key player in the AI space. We expect recent funding, part of which it used to build training centers, to support innovation by enhancing computational power and attracting top talent. Musk's track record in AI development and the founding team's extensive experience, in addition to unique data access, software and hardware integration, and distribution opportunities, provide a competitive edge.

Red Rock Resorts, Inc. (RRR) owns and operates 20 local casinos in Las Vegas and is in the planning stages of developing and managing a tribal casino in California. The company also controls seven gaming-entitled sites consisting of almost 600 acres in Las Vegas and 30 acres in Reno.
Red Rock operates in the improving Las Vegas locals gaming market, which is now back to previous peak levels. We think the market is attractive, given favorable fundamentals including population growth 2.7 times the national average and $20 billion in projects either in the planning stages or under development. The market also offers the lowest tax rate in the U.S., with limitations on the development of new casinos in the region. Red Rock also has the option to develop or sell its owned acreage.

Hyatt Hotels Corporation (H) is a global hospitality company with 1,363 Hyatt-branded properties representing 326,845 keys. The company's brands include Park Hyatt, Grand Hyatt, Hyatt Regency, Hyatt, Hyatt Place, and Hyatt Summerfield Suite. It derives 90% of EBITDA from fees and 10% from owned assets.
We believe Hyatt has a significant opportunity to market more of its brands globally, given an undersupply of rooms across the world. Compared to peers, Hyatt has the lowest global brand penetration and the largest pipeline of unit growth. We believe its asset-light strategy and strong balance sheet, coupled with robust pricing for hotel assets, give Hyatt an opportunity to generate strong growth in earnings and cash flow, which the company could use for buybacks and tuck-in acquisitions.