Review and Outlook

as of 03/31/22

The Review and Outlook for period ending March 31, 2022, is not yet available.

Top Contributors/Detractors to Performance

as of 03/31/22


  • CrowdStrike, Inc. is a cloud-architected SaaS cybersecurity vendor. Shares increased on the back of impressive quarterly results with net new annual recurring revenue (ARR) accelerating for the second straight quarter to 52% year-over-year and 30% free cash flow margins. These results put CrowdStrike in rare company. Key new disclosures highlight how non-endpoint products are seeing momentum, with cloud product-generated ARR surpassing $100 million, representing 8% of net new ARR in the quarter.
  • ZoomInfo Technologies Inc. operates a cloud-based B2B platform that provides sales, marketing, and HR teams with comprehensive business intelligence, enabling shorter sales cycles and higher win rates. Shares contributed to performance following positive earnings results and strong forward bookings commentary. New products are starting to build momentum, and we believe ZoomInfo can become a much larger company over time as it grows into its $70 billion revenue total addressable market.
  •, Inc. is the world’s largest retailer and cloud services provider. Shares were up after the company's board approved a 20-for-1 stock split and authorized a repurchase program of up to $10 billion. These were both well-received signals as Amazon has historically been a prudent buyer of its own stock. Amazon has also been performing well across its core Retail, Cloud, and Advertising businesses. We continue to believe that Amazon has a long runway of growth ahead with less than 20% of commerce online and 40% of business workloads in the cloud.


  • EPAM Systems, Inc. provides outsourced software development to business customers. The stock fell sharply as a result of anticipated business disruption from Russia’s military invasion of Ukraine, where many of EPAM’s employees are based. Management withdrew financial guidance due to operational challenges from the war and economic sanctions. Although EPAM is facing significant near-term uncertainty, we believe the long-term risk-reward remains favorable given the company’s longstanding customer relationships and flexibility to shift client work across its global footprint.
  • Shopify Inc. is a cloud-based software provider offering an operating system for multi-channel commerce. Shopify has been adopted by over two million merchants that processed $175 billion of gross merchandise volume in 2021, making it the second largest e-commerce player in the U.S. The stock corrected due to the normalization in e-commerce from the early stages of the pandemic and the rotation out of fast-growth stocks. We believe Shopify has a long runway for growth as it has less than 1% of global commerce spend.
  • S4 Capital plc is a global marketing services business founded by Sir Martin Sorrell, the founder and former CEO of WPP, the largest ad agency in the world. S4 encompasses creative production firm MediaMonks and data-driven media consultancy MightyHive. Shares were down on broader concerns about a weakening advertising environment and the fact that the company’s auditor, PwC, said they were unable to complete the work needed for S4 to release their 2021 results. It is our view that the delay in the release will not end up being material to the company’s long term growth opportunities.

Quarterly Attribution Analysis (Institutional Shares)

as of 03/31/22

Baron Technology Fund (Institutional Shares) declined 16.40% in the first quarter, trailing the MSCI ACWI Information Technology Index by 612 basis points due to a combination of stock selection and differences in industry weights.

Cash exposure in a down market, unique exposure to internet & direct marketing retailers, and lower exposure to lagging electronic equipment instruments & components stocks added the most value. Strength in internet & direct marketing retail came from, Inc., the world’s largest retailer and cloud services provider. Amazon’s shares held up better than the broader market after the company’s recently approved stock split and sizeable repurchase program were well received by investors. The company has also been performing well across its core Retail, Cloud, and Advertising businesses.

Investments in IT services, semiconductors & semiconductor equipment, and software accounted for most of stock-specific weakness in the period. Lack of exposure to index heavyweight Apple, Inc. in technology hardware storage & peripherals and unique exposure to the media and entertainment industries also proved costly during the quarter. Unfavorable stock selection in IT services was driven by significant declines from outsourced software development provider EPAM Systems, Inc. and cloud-based commerce platform Shopify Inc. EPAM was the largest detractor after management withdrew guidance because of the anticipated business disruption from Russia’s military invasion of Ukraine, where many of the company’s employees are based. We exited our EPAM position given the significant near-term operational challenges facing the company as a result of the war. Shopify was another top detractor due to the normalization in e-commerce from the early stages of the pandemic and the rotation out of fast-growth stocks. Within semiconductors & semiconductor equipment, lower exposure to Taiwan Semiconductor Manufacturing Company Ltd., whose shares outperformed during the quarter, and sharp declines from Advanced Micro Devices, Inc. and Lam Research Corporation hampered performance. Several of the Fund’s software holdings were hurt by the rotation out of high-multiple growth stocks during the quarter, namely Ceridian HCM Holding Inc., Snowflake Inc., HubSpot, Inc., The Trade Desk, and Intuit Inc. Weakness in media came from global marketing services business S4 Capital plc and special-interest publisher Future plc, whose shares were negatively impacted by concerns about a weakening advertising environment. S4’s stock also came under pressure when an auditing delay pushed back the release of the company’s fiscal year results. Global streaming service Netflix, Inc. and digital music services provider Spotify Technology S.A. were responsible for much of the relative shortfall in the entertainment industry. Netflix’s shares were down after user additions fell short of investor expectations, while Spotify’s stock was hurt by the controversy surrounding Joe Rogan, a podcaster exclusive to Spotify's platform.