Guinness Global Innovators, an investment management company, recently released its Q1 2026 quarterly investor update for its “Guinness Global Innovators Fund”. A copy of the letter is available to download here. The Guinness Global Innovators Fund focuses on investing in global companies that benefit from innovation in technology, communication, globalization, and management strategies. In Q1 2026, the fund returned was -4.5% (GBP), compared to -1.6% for the MSCI World Index and -2.6% for the IA Global sector average. The quarter saw major changes in market sentiment due to geopolitical tensions and energy market disruptions. The market shifted focus from growth-oriented mega-cap technology and software stocks to value stocks, defensives, international markets, and physical economy sectors. The fund’s lack of exposure to more defensive sectors and energy negatively impacted quarterly performance. The letter discusses how the geopolitical situation influences market dynamics and examines software industry weaknesses to determine the structural change in the landscape and how companies are being repriced in the market. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Guinness Global Innovators Fund highlighted Applied Materials, Inc. (NASDAQ:AMAT) as a leading contributor. Applied Materials, Inc. (NASDAQ:AMAT) is a leading supplier of materials engineering solutions, equipment, services, and software to the semiconductor and related industries. On June 10, 2026, Applied Materials, Inc. (NASDAQ:AMAT) closed at $497.01 per share. One-month return of Applied Materials, Inc. (NASDAQ:AMAT) was 12.81%, and its shares gained 184.01% over the past 52 weeks. Applied Materials, Inc. (NASDAQ:AMAT) has a market capitalization of $394.61 billion.
Guinness Global Innovators Fund stated the following regarding Applied Materials, Inc. (NASDAQ:AMAT) in its Q1 2026 investor letter:
“Applied Materials, Inc. (NASDAQ:AMAT) was the Fund’s top performer in the quarter thanks to an excellent quarterly earnings print. Results and forward commentary pointed to a clear inflection in growth beginning in the second half of FY 2026, highlighting the firm’s significant exposure and leading role in the global AI infrastructure build-out. Applied Materials is the broadest player in front-end, process control and advanced packaging manufacturing and remains well positioned to capture share as chipmakers invest in the full range of semiconductor manufacturing processes. Although headline revenue declined 2.1% year-on-year due to difficult comparators as a result of China normalisation and lumpy orders from Taiwan Semiconductor Manufacturing, this was comfortably ahead of expectations and at the top end of management guidance. Adjusted earnings per share were flat year-on-year but also beat consensus, supported by stronger-than-expected revenue and solid margin execution. Importantly, underlying demand trends were notably stronger than the headline numbers suggest.
Management’s commentary highlighted that AI was approaching a “tipping point” where the race for higher performance and energy efficiency is funnelling unprecedented investment into leading-edge logic, high-bandwidth memory, and advanced packaging – all areas where Applied Materials maintains a process equipment leadership position. Despite management indicating that the first half will remain relatively soft, a meaningful inflection is expected in the second half, with equipment sales projected to grow more than 20% in 2026. This implies the potential for second-half systems revenue growth of roughly 30-40% year-on-year, bringing Applied Materials’ growth outlook broadly in line with peers such as KLA and Lam Research, which are also held within the Fund. Management’s decidedly upbeat tone was underpinned by a sharp acceleration in customer orders, particularly in leading-edge foundry/logic and DRAM, but even more encouraging was the outlook. Capacity is effectively sold out for 2026, providing unusually strong visibility for a business with historically short lead times. To prepare for this demand, the company has nearly doubled its system manufacturing capacity over the past few years and proactively increased its inventory by nearly $500 million year-on-year to support 2026–2027.”
Applied Materials, Inc. (NASDAQ:AMAT) ranks 39 on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 138 hedge fund portfolios held Applied Materials, Inc. (NASDAQ:AMAT) at the end of the first quarter, up from 111 in the previous quarter. In the second quarter of fiscal 2026, Applied Materials, Inc. (NASDAQ:AMAT) reported record revenue of $7.91 billion, up 13% sequentially and 11% year-over-year. While we acknowledge the risk and potential of Applied Materials, Inc. (NASDAQ:AMAT) 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 Applied Materials, Inc. (NASDAQ:AMAT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Applied Materials, Inc. (NASDAQ:AMAT) and shared the list of good stocks to invest in. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. This article is originally published at Insider Monkey.
