Parnassus Investments, an investment management company, released the “Parnassus Mid Cap Fund” fourth-quarter 2025 investor letter. A copy of the letter is available to download here. The Q4 2025 marked the fund’s consecutive quarter of outperformance, returning 1.17% (net of fees) in the quarter, surpassing 0.16% return for the Russell Midcap Index. The performance was supported by investments in the Information Technology sector, as well as holdings in Utilities. During the quarter, the market started to grow beyond artificial intelligence. YTD, the Fund returned 12.85% (net of fees) compared to 10.60% return for the index. Looking ahead to 2026, the Fund is optimistic, as mid-cap stocks may drive the market upward if economic growth continues to expand beyond AI. In the event of a market decline, the Fund believes that its portfolio of leading companies with solid financial positions will provide downside protection. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, Parnassus Mid Cap Fund highlighted stocks like CoStar Group, Inc. (NASDAQ:CSGP). CoStar Group, Inc. (NASDAQ:CSGP) is an information, analytics, and online marketplace services provider for commercial and residential property markets. On March 30, 2026, CoStar Group, Inc. (NASDAQ:CSGP) stock closed at $40.88 per share. One-month return of CoStar Group, Inc. (NASDAQ:CSGP) was -12.70%, and its shares lost 46.52% of their value over the last three months. CoStar Group, Inc. (NASDAQ:CSGP) has a market capitalization of about $17.042 billion.
Parnassus Mid Cap Fund stated the following regarding CoStar Group, Inc. (NASDAQ:CSGP) in its fourth quarter 2025 investor letter:
“CoStar Group, Inc. (NASDAQ:CSGP) shares detracted due to investor concerns over increased competition from Google in the home-listing market, a weak housing market and substantial investments in its Homes.com business. We also sold CoStar Group, as the company’s valuation will remain high until it’s able to monetize its significant investments in Homes.com. CoStar Group is a leading provider of online real estate market places, information and analytics in the commercial and residential property markets. We felt the stock’s valuation was high given its continued significant investments in Homes.com have an uncertain payoff.”
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CoStar Group, Inc. (NASDAQ:CSGP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 58 hedge fund portfolios held CoStar Group, Inc. (NASDAQ:CSGP) at the end of the fourth quarter, up from 57 in the previous quarter. While we acknowledge the potential of CoStar Group, Inc. (NASDAQ:CSGP) 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.
