Multiple Tailwinds Lifted Exact Sciences Corporation (EXAS) in 2025

Baron Funds, an investment management company, released its “Baron Discovery Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Fund focuses on long-term, competitively positioned companies that are well-managed and have significant potential in untapped markets. The letter also addressed the advancements in AI and how humans define themselves in the changing landscape. In Q4, the fund generated a return of 0.19% (Institutional Shares), underperforming the Russell 2000 Growth Index by 1.03 percentage points. Over the entire year, the fund posted a return of 10.96%, while the Index returned 13.01%. The outperformance of low-quality and short-term price momentum-oriented stocks affected the Fund’s focus on long-term valuation metrics. The top 10 holdings comprised 26.7% of the Fund’s net assets, with cash making up 3.3%. The Fund maintains strong optimism and expects a high-growth, low-inflation environment in 2026. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Baron Discovery Fund highlighted stocks like Exact Sciences Corporation (NASDAQ:EXAS). Exact Sciences Corporation (NASDAQ:EXAS) provides cancer screening and diagnostic test products and is a significant contributor to the fund’s performance in the quarter. On February 2, 2026, Exact Sciences Corporation (NASDAQ:EXAS) stock closed at $102.50 per share. One-month return of Exact Sciences Corporation (NASDAQ:EXAS) was 0.84%, and its shares gained 87.21% of their value over the last 52 weeks. Exact Sciences Corporation (NASDAQ:EXAS) has a market capitalization of $19.47 billion.

Baron Discovery Fund stated the following regarding Exact Sciences Corporation (NASDAQ:EXAS) in its fourth quarter 2025 investor letter:

"Shares of Exact Sciences Corporation (NASDAQ:EXAS) contributed to performance. Exact is a molecular diagnostics company focused on the early detection of colorectal cancer. It is best known for its non invasive colorectal cancer screening stool test called Cologuard. The big picture is that half of the 106 million adults in the U.S. recommended for colorectal cancer screening are not up to date, and we think the Cologuard test presents the best combination of non-invasiveness and accurate sensitivity/specificity as compared to more invasive colonoscopies and less accurate blood tests. Exact shares outperformed in 2025 as the restructuring of the commercial team drove Cologuard volume growth reacceleration, and shares further outperformed as Abbott Laboratories announced an agreement to acquire Exact Sciences for $23 billion in November. The deal represents a >50% premium over the prior closing price."

Exact Sciences Corporation (NASDAQ:EXAS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 52 hedge fund portfolios held Exact Sciences Corporation (NASDAQ:EXAS) at the end of the third quarter, up from 50 in the previous quarter. While we acknowledge the potential of Exact Sciences Corporation (NASDAQ:EXAS) 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 Exact Sciences Corporation (NASDAQ:EXAS) and shared Meridian Growth Fund's views on the company. In addition, please check out our hedge fund investor letters Q4 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.