Should You Increase Your Holdings in Mastercard Incorporated (MA)?

Baron Funds released its “Baron Durable Advantage Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund primarily focuses on investing in securities of large-sized companies. The fund increased 15.6% (Institutional Shares) in the second quarter compared to a 10.9% return for the S&P 500 Index (the Index). The Fund is up 7.5%, year to date, compared to the 6.2% gain for the Index. After two consecutive years of strong market recovery, there was a correction at the end of the first quarter and the early part of the second quarter. But later in the second quarter, the market rebounded meaningfully. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its second-quarter 2025 investor letter, Baron Durable Advantage Fund highlighted stocks such as Mastercard Incorporated (NYSE:MA). Mastercard Incorporated (NYSE:MA) is a payment technology company that offers transaction processing and other payment-related products and services. The one-month return of Mastercard Incorporated (NYSE:MA) was 5.44%, and its shares gained 26.64% of their value over the last 52 weeks. On August 20, 2025, Mastercard Incorporated (NYSE:MA) stock closed at $592.68 per share, with a market capitalization of $535.79 billion.

Baron Durable Advantage Fund stated the following regarding Mastercard Incorporated (NYSE:MA) in its second quarter 2025 investor letter:

"Very briefly on the other, smaller adds to existing investments during the second quarter. Payments network Mastercard Incorporated (NYSE:MA) - we took advantage of stock price volatility. Despite the news around stable coins, we believe payment processing networks (which we think of as digital railroads) are unlikely to be disrupted since consumers are unlikely to change payment methods without personal benefits. Credit cards offer plentiful rewards, a 30- to 45-day free revolving credit, and various consumer protections against fraud and other abuse."

Mastercard Incorporated (NYSE:MA) is in 11th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 155 hedge fund portfolios held Mastercard Incorporated (NYSE:MA) at the end of the first quarter, which was 151 in the previous quarter. Mastercard Incorporated’s (NYSE:MA) second-quarter net revenue rose by 16%, driven by continued growth in the payment network and value-added services and solutions. While we acknowledge the potential of Mastercard Incorporated (NYSE:MA) 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.

In another article, we covered Mastercard Incorporated (NYSE:MA) and shared the list of best NYSE stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q2 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.