In the final quarter of 2025, Brown Advisory's Mid-Cap Growth Strategy observed a notable downturn in the performance of Gartner, Inc. (NYSE:IT). The investment firm, which aims to achieve strong risk-adjusted returns by investing in high-quality mid-cap companies, acknowledged that its strategy lagged the Russell Midcap® Growth Index, primarily due to specific stock choices. Gartner, a prominent research and advisory firm founded in 1979, experienced a significant drop in its stock value, with shares plummeting by 61.45% over the preceding 52 weeks, closing at $162.59 per share on March 23, 2026, and valuing the company at $11.719 billion.
The decline in Gartner's stock is attributed to a combination of broader macroeconomic headwinds and growing market anxieties regarding the potential disruptive influence of artificial intelligence (AI) tools on the company's established research services. The market's perception is that AI-driven solutions could potentially disintermediate some of Gartner's core offerings, leading to a cautious outlook from investors. Despite these challenges, Gartner did report a 2% year-over-year revenue increase, reaching $1.8 billion in the fourth quarter of 2025, indicating resilience in its operational performance.
Brown Advisory's letter highlighted that their strategy's overall underperformance in 2025 was also partly due to the absence of Palantir Technologies Inc (PLTR) in their portfolio. While Gartner maintained a presence in 50 hedge fund portfolios by the end of Q4 2025, an increase from the previous quarter, the firm suggests that other AI stocks might present more favorable upside potential with reduced downside risk, particularly those poised to benefit from Trump-era tariffs and the trend of onshoring.
The fluctuation in Gartner's stock performance underscores the dynamic nature of the technology and consulting sectors, where innovation, particularly in AI, can rapidly reshape market perceptions and investment strategies. Companies must continuously adapt to evolving technological landscapes and competitive pressures to sustain growth and investor confidence.