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 Ulta Beauty, Inc. (NASDAQ:ULTA) as one of its new additions to the portfolio. . Ulta Beauty, Inc. (NASDAQ:ULTA) is the largest beauty retailer in the US that offers a wide range of beauty products and services. On March 23, 2026, Ulta Beauty, Inc. (NASDAQ:ULTA) stock closed at $516.11 per share. One-month return of Ulta Beauty, Inc. (NASDAQ:ULTA) was -24.81%, and its shares lost 39.21% over the past 52 weeks. Ulta Beauty, Inc. (NASDAQ:ULTA) has a market capitalization of $23.142 billion.

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

"Under the leadership of a newly promoted CEO, Ulta Beauty, Inc. (NASDAQ:ULTA) has returned to positive same-store sales growth and margins appear to have stabilized. The company stands to benefit from a re-accelerating U.S. beauty market, with international expansion providing potential upside beginning in 2026. Additional optionality from e-commerce, marketplace initiatives, and UB Media could drive further upside."

Ulta Beauty, Inc. (NASDAQ:ULTA) 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 Ulta Beauty, Inc. (NASDAQ:ULTA) at the end of the fourth quarter, up from 56 in the previous quarter. While we acknowledge the potential of Ulta Beauty, Inc. (NASDAQ:ULTA) 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 Ulta Beauty, Inc. (NASDAQ:ULTA) and shared the list of stocks Jim Cramer discussed. 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.