Doximity, Inc. (DOCS) Fell Following Disappointing Guidance

Baron Funds, an investment management company, released its fourth-quarter investor letter for the “Baron Health Care Fund”. A copy of the letter can be downloaded here. The fund rose 13.10% (Institutional Shares) in the quarter, compared to a 11.92% gain for the Russell 3000 Health Care Index (benchmark) and a 2.40% gain for the Russell 3000 Index (the Index). The Fund returned 10.28% for the full year, compared to 14.56% and 17.15% gains for the indexes, respectively. Strong stock selection in biotechnology contributed to the Fund’s relative gains in the quarter.  The Fund seeks to invest in businesses with secular growth opportunities, a sustainable competitive edge, and strong management. The firm believes that healthcare is a strong sector in the U.S. economy, offering attractive investment opportunities with positive momentum heading into 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 Health Care Fund highlighted Doximity, Inc. (NYSE:DOCS) as one of the leading detractors. Headquartered in San Francisco, California, Doximity, Inc. (NYSE:DOCS) provides a cloud-based digital platform for medical professionals. On February 5, 2026, Doximity, Inc. (NYSE:DOCS) stock closed at $33.32 per share. One-month return of Doximity, Inc. (NYSE:DOCS) was -23.91%, and its shares lost 57.95% of their value over the last three months. Doximity, Inc. (NYSE:DOCS) has a market capitalization of $6.273 billion.

Baron Health Care Fund stated the following regarding Doximity, Inc. (NYSE:DOCS) in its fourth quarter 2025 investor letter:

"Doximity, Inc. (NYSE:DOCS) is a leading digital platform and professional network for U.S. health care professionals. The stock detracted from performance as the company issued disappointing guidance for the next two quarters. Client discussions indicated uncertainty around how recent policy changes may affect annual budgets, prompting management to take a more measured approach to revenue yet to be booked. Given the limited visibility and increased competition from emerging peers, we exited the position."

Doximity, Inc. (NYSE:DOCS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 44 hedge fund portfolios held Doximity, Inc. (NYSE:DOCS) at the end of the third quarter, up from 41 in the previous quarter. In the second quarter of fiscal 2026, Doximity, Inc. (NYSE:DOCS) generated revenue of $169 million, marking an increase of 23% year-on-year. While we acknowledge the potential of Doximity, Inc. (NYSE:DOCS) 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 Doximity, Inc. (NYSE:DOCS) 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.