On Holding (ONON) Fell on Macro Economic Uncertainty and Rising Competition

Baron Funds, an investment management company, released its “Baron Focused Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund delivered strong results in the third quarter, appreciating 4.83% (Institutional Shares); however, the performance underperformed the Russell 2500 Growth Index’s (the Benchmark) 10.73% gain. The fund's underperformance stemmed from concerns over a slowdown in economic growth affecting the fund’s more economically sensitive Consumer Discretionary stocks. Furthermore, the rise in competitive pressures has adversely affected the valuations of a few of its holdings. 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 Focused Growth Fund highlighted stocks such as On Holding AG (NYSE:ONON). On Holding AG (NYSE:ONON) develops and distributes sports products. The one-month return of On Holding AG (NYSE:ONON) was -16.67%, and its shares lost 28.38% of their value over the last 52 weeks. On November 5, 2025, On Holding AG (NYSE:ONON) stock closed at $36.08 per share, with a market capitalization of $11.782 billion.

Baron Focused Growth Fund stated the following regarding On Holding AG (NYSE:ONON) in its third quarter 2025 investor letter:

"Shares of premium footwear and apparel brand On Holding AG (NYSE:ONON) fell during the quarter amid macroeconomic uncertainty and concerns about rising competition in the global sportswear industry. Despite these headwinds, the company delivered strong quarterly results, with revenue up 38% and broad-based growth across regions and categories. Management also raised its revenue and profitability expectations for the year. We maintain conviction in On’s ability to gain market share in the attractive global sportswear segment through its premium brand positioning and innovative product offerings, and we believe shares remain undervalued at current levels."

On Holding AG (NYSE:ONON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 42 hedge fund portfolios held On Holding AG (NYSE:ONON) at the end of the second quarter, compared to 53 in the previous quarter. While we acknowledge the potential of On Holding AG (NYSE:ONON) 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 On Holding AG (NYSE:ONON) and shared the list of stocks to buy with over 50% upside potential. In addition, please check out our hedge fund investor letters Q3 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.