Here's What Drove Baron Health Care Fund to Add AbbVie (ABBV) to Its Portfolio

Baron Funds, an investment management company, released its “Baron Health Care Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund rose 5.39% (Institutional Shares) in the quarter, compared to a 5.05% gain for the Russell 3000 Health Care Index (benchmark) and an 8.18% gain for the Russell 3000 Index (the Index). The Fund performed similarly to the Benchmark this quarter. Solid stock selection was primarily offset by negative effects from active sub-industry allocations and cash holdings during a rising market. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as AbbVie Inc. (NYSE:ABBV). AbbVie Inc. (NYSE:ABBV) is a research-based biopharmaceutical company. The one-month return of AbbVie Inc. (NYSE:ABBV) was -5.28%, and its shares gained 8.76% of their value over the last 52 weeks. On October 31, 2025, AbbVie Inc. (NYSE:ABBV) stock closed at $218.04 per share, with a market capitalization of $385.18 billion.

Baron Health Care Fund stated the following regarding AbbVie Inc. (NYSE:ABBV) in its third quarter 2025 investor letter:

"We bought shares of AbbVie Inc. (NYSE:ABBV), a large biopharmaceutical company with a product portfolio across immunology, oncology, aesthetics, neurosciences, and eye care. Two key growth drivers are Skyrizi, a biologic therapy for plaque psoriasis, psioriatic arthritis, Crohn’s disease, and Ulcerative colitis; and Rinvoq, an oral, once daily treatment for multiple inflammatory diseases. After having recently settled litigation with generic manufacturers regarding the generic entry for Rinvoq which pushed out the expected date of competition to 2037, AbbVie has no major patent expirations until the mid-2030s. We expect AbbVie to generate high single digit top-line growth and low double-digit bottom-line growth for many years. We also expect the company to continue to use its strong balance sheet for small tuck-in acquisitions to expand the company’s pipeline and drive future growth."

AbbVie Inc. (NYSE:ABBV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 89 hedge fund portfolios held AbbVie Inc. (NYSE:ABBV) at the end of the second quarter, up from 86 in the previous quarter. AbbVie Inc. (NYSE: ABBV) reported total net revenues of $15.4 billion in Q2 2025, exceeding expectations by more than $400 million. While we acknowledge the potential of AbbVie Inc. (NYSE:ABBV) 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 AbbVie Inc. (NYSE:ABBV) and shared the list of stocks everyone’s discussing amid latest earnings seasons. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.