Baron Funds, an investment management company, released its “Baron Health Care Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund returned 2.54% (Institutional Shares) in the quarter compared to a 3.87% gain for the Russell 3000 Health Care Index (benchmark) and a 4.72% decline for the Russell 3000 Index (the Index). The fund trailed the benchmark due to stock selection and, to a lesser extent, active sub-industry weights. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as Glaukos Corporation (NYSE:GKOS). Glaukos Corporation (NYSE:GKOS) is an ophthalmic pharmaceutical and medical technology company. The one-month return of Glaukos Corporation (NYSE:GKOS) was -3.18%, and its shares lost 16.98% of their value over the last 52 weeks. On May 9, 2025, Glaukos Corporation (NYSE:GKOS) stock closed at $89.96 per share with a market capitalization of $5.14 billion.

Baron Health Care Fund stated the following regarding Glaukos Corporation (NYSE:GKOS) in its Q1 2025 investor letter:

"Glaukos Corporation (NYSE:GKOS) develops and sells interventional glaucoma treatments, including iDose, a minimally invasive drug-delivery device launched in 2024. An iDose is implanted as a five minute procedure and delivers highly concentrated prostaglandin inside the eye effective for up to three years. Shares declined on quarterly iDose results that missed elevated investor expectations. Although feedback has been positive, doctors have been hesitant to use iDose until they are confident they will receive reimbursement for this expensive device. Medicare coverage has started to solidify in some regions, and we think coverage across the board is a matter of when, not if. We believe uptake will accelerate over the coming quarters as the reimbursement process becomes more streamlined. Glaucoma is a large market that is ripe for new standalone interventions, and we think iDose can be a $1 billion product over time."

A doctor examining a patient's eyes with an ophthalmic medical device.

Glaukos Corporation (NYSE:GKOS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Glaukos Corporation (NYSE:GKOS) at the end of the fourth quarter compared to 32 in the third quarter. In the first quarter of 2025, Glaukos Corporation’s (NYSE:GKOS) reported revenue of $106.7 million representing 25% increase on a reported basis, or 26% on a constant currency basis compared to Q1 2024. While we acknowledge the potential of Glaukos Corporation (NYSE:GKOS) 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.

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In another article, we covered Glaukos Corporation (NYSE:GKOS) and shared ClearBridge Small Cap Growth Strategy's views on the company. In addition, please check out our hedge fund investor letters Q1 2025 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.

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