Harris Oakmark recently released its second-quarter 2026 investor letter for the “Oakmark Equity and Income Fund”. A copy of the letter can be downloaded here. Oakmark Equity and Income Fund aims to maximize returns while preserving and enhancing capital. The portfolio consists of US equities and fixed-income securities. The allocation was 60.1% in equities, 38.9% in fixed income, and 1.0% cash. The Fund (Investor Class) underperformed the 60% S&P 500 / 40% Bloomberg U.S. Aggregate Bond Index in the quarter and has outperformed since its inception. The equity portion of the portfolio generated 6.84% compared to 15.20% for the S&P 500 Index. The fixed income portfolio returned 1.13% compared to the Bloomberg U.S. Aggregate Bond Index’s 0.67% return. Investors continued to favor companies perceived to be direct beneficiaries of AI spending in a narrow leadership environment. In this landscape, the firm remains focused on owning undervalued companies rather than chasing the market’s most popular themes. In addition, you can check the Fund’s top five holdings to determine its best picks for 2026.
In its Q2 2026 investor letter, Oakmark Equity and Income Fund highlighted Alphabet Inc. (NASDAQ:GOOG) as a leading performance contributor. Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services, including online search and advertising, cloud solutions, and artificial intelligence. On July 13, 2026, Alphabet Inc. (NASDAQ:GOOG) closed at $350.67 per share, reflecting a market capitalization of $4.28 trillion. Alphabet Inc. (NASDAQ:GOOG) posted a one-month return of -5.51%, while its shares gained 91.52% over the past 52 weeks.
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2026 investor update:
“Alphabet Inc. (NASDAQ:GOOG) was the top contributor during the quarter. Shares of the U.S.-headquartered technology conglomerate appreciated following strong first quarter results headlined by accelerating Search revenue growth. In Search, AI Overviews and AI Mode continue to drive healthy user engagement growth while AI-powered advertiser tools are leading to higher monetization rates. In Google Cloud, results beat expectations by a wide margin as significant demand for AI compute capacity drove 63% y/y revenue growth and a near doubling of backlog compared with the prior quarter. We continue to find Alphabet attractive on a sum-of-the parts basis and see its leadership in artificial intelligence as creating upside opportunities across its business segments.”
Alphabet Inc. (NASDAQ:GOOG) ranks 7th on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 201 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter, compared to 203 in the previous quarter. In 2025, Alphabet Inc. (NASDAQ:GOOG) achieved its first-ever $400 billion annual revenue and in Q1 2026 its consolidated revenue reached $109.9 billion, up 22% or 19% in constant currency. While we acknowledge the risk and potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Alphabet Inc. (NASDAQ:GOOG) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Alphabet Inc. (NASDAQ:GOOG) and shared the list of best stocks to buy from Ray Dalio Stock Portfolio. In addition, please check out our hedge fund investor letters Q2 2026 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.
