Baron Funds, an investment management company, released its “Baron Global Advantage Fund” investor letter for the second quarter of 2025. A copy of the letter can be downloaded here. In the second quarter, the fund returned 22.7% (Institutional Shares), compared to the MSCI ACWI Index’s (the Index) 11.5% gain and the MSCI ACWI Growth Index’s 17.3% gain. The Fund is up 11.2%, year-to-date, compared to gains of 10.1% and 9.3% for the benchmarks, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its second-quarter 2025 investor letter, Baron Global Advantage Fund highlighted stocks such as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. The one-month return of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was 4.89%, and its shares gained 53.81% of their value over the last 52 weeks. On August 4, 2025, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock closed at $239.00 per share, with a market capitalization of $1.24 trillion.
Baron Global Advantage Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its second quarter 2025 investor letter:
“Our largest add during the quarter was Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as we continued to build our position. We believe that while near-term uncertainty due to tariffs and macro remains heightened, TSMC’s competitive positioning in leading-edge semiconductor manufacturing remains unmatched. We also believe that TSMC will benefit from a long duration of growth as the adoption of AI proliferates across industries – and the recent developments in the space which we discussed above (e.g. removal of the AI Diffusion rule, accelerated adoption of reasoning-based AI inference, and the expansion of scaling laws) will serve to further accelerate the adoption of AI. We also like the fact that TSMC will benefit regardless of the ultimate market share split between GPUs and application-specific integrated circuits. It’s the ultimate “arms dealer” to AI.”
A close-up of a complex network of integrated circuits used in logic semiconductors.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 9th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 187 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the first quarter, which was 186 in the previous quarter. While we acknowledge the potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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