Baron Capital Adds Blackstone Digital Infrastructure Trust (BXDC) on Strong Leadership and Robust Pipeline

Baron Capital included Blackstone Digital Infrastructure Trust (BXDC) in its Q2 2026 investor letter for the Baron Small Cap Fund. The Small Cap Fund gained 12.57% in the quarter, slightly behind the 25.71% return of the Russell 2000 Growth Index. U.S. equities recovered after a March sell-off due to the U.S.-Iran conflict, with technology stocks, particularly AI infrastructure and semiconductors, contributing to the market's gains.

Small-cap stocks outperformed large-cap stocks, but growth remained concentrated in high-beta and momentum stocks, areas where the Fund typically has less exposure. The Fund's gains were driven by several AI-related and industrial holdings, though software and services stocks faced pressure due to potential AI disruption. Looking ahead, the Fund anticipates broader market participation, attractive small-cap valuations, improving industrial growth, and stronger earnings to support future returns despite uncertainties in oil prices, inflation, and interest rates.

Baron Capital highlighted BXDC in its letter, noting the company's focus on acquiring and owning mission-critical data center assets that power the digital economy. BXDC closed at $20.33 per share on August 17, 2026, with a one-month return of 1.55% and a 3-month loss of 9.00%. The Fund's investment in BXDC was facilitated by Blackstone's significant experience and pipeline of over $25 billion in digital infrastructure deals, making the investment appealing due to the lack of large-scale capital dedicated to acquiring stabilized data center assets.