Brown Advisory, an investment management company, released its “Brown Advisory Mid-Cap Growth Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Strategy lagged the Russell Midcap® Growth Index in the fourth quarter due to stock selection. The performance was in line with expectations for the full year. The firm believes that the Strategy underperformed in 2025 because it did not own Palantir Technologies Inc (PLTR). The Strategy focuses on achieving solid risk-adjusted returns by investing in high-quality compounders with fair valuations and market capitalizations between $2 billion and $50 billion at the time of purchase. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Brown Advisory Mid-Cap Growth Strategy highlighted stocks like Zscaler, Inc. (NASDAQ:ZS). Zscaler, Inc. (NASDAQ:ZS) is a leading cloud security company that provides cyberthreat protection products. On March 23, 2026, Zscaler, Inc. (NASDAQ:ZS) stock closed at $151.80 per share. One-month return of Zscaler, Inc. (NASDAQ:ZS) was 1.63%, and its shares lost 29.63% over the past 52 weeks. Zscaler, Inc. (NASDAQ:ZS) has a market capitalization of $24.408 billion.

Brown Advisory Mid-Cap Growth Strategy stated the following regarding Zscaler, Inc. (NASDAQ:ZS) in its fourth quarter 2025 investor letter:

“We repurchased Zscaler, Inc. (NASDAQ:ZS) in the quarter following a selloff tied to a large-scale M&A announcement. While the transaction created near-term uncertainty, we see strong strategic rationale behind the deal, which presented an attractive entry for the leader in the growing SASE security software market that is executing against a multi-product cross-sell strategy, driving ARPU and margin growth.”

Zscaler, Inc. (NASDAQ:ZS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 56 hedge fund portfolios held Zscaler, Inc. (NASDAQ:ZS) at the end of the fourth quarter, up from 50 in the previous quarter. While we acknowledge the potential of Zscaler, Inc. (NASDAQ:ZS) 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 Zscaler, Inc. (NASDAQ:ZS) and shared the list of technology stocks with insider buying in 2026. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.