Artisan Partners, an investment management company, released its first-quarter 2026 investor letter for the “Artisan Small Cap Fund”. A copy of the letter is available to download here. US equities were mixed in Q1 2026, with major indices hitting all-time highs in January before retreating amid geopolitical tensions, changing monetary policy, and economic uncertainty. Energy stocks surged, outpacing the market, while value outperformed growth as investors moved from tech to commodity-sensitive sectors. Market leadership broadened, with mid- and small-cap indices performing better than large caps. The Iran conflict influenced market behavior. AI-related investments supported capital spending and earnings, though investor sentiment was mixed. The portfolio saw negative absolute returns but outpaced the Russell 2000® Growth Index, offering some downside protection. Investor Class: ARTSX, Advisor Class: APDSX, and Institutional Class: APHSX returned -2.72%, -2.68%, and -2.69%, respectively, in the first quarter compared to -2.81% return for the index. The market shifted towards cyclical, commodity sectors, less aligned with high-quality franchises, due to geopolitical events and energy shocks. Despite this, many portfolio companies maintained solid earnings aligned with their profit cycles. The Firm views this environment as supportive of its stock selection approach, focused on bottom-up stock selection across industries. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Artisan Small Cap Fund highlighted stocks like FTAI Aviation Ltd. (NASDAQ:FTAI). FTAI Aviation Ltd. (NASDAQ:FTAI) is an aviation company that owns, acquires, and sells aviation equipment. On June 4, 2026, FTAI Aviation Ltd. (NASDAQ:FTAI) closed at $250.09 per share. One-month return of FTAI Aviation Ltd. (NASDAQ:FTAI) was -7.47%, and its shares gained 93.61% over the past 52 weeks. FTAI Aviation Ltd. (NASDAQ:FTAI) has a market capitalization of $25.65 billion.
Artisan Small Cap Fund stated the following regarding FTAI Aviation Ltd. (NASDAQ:FTAI) in its Q1 2026 investor letter:
“Notable trims during the quarter were FTAI Aviation Ltd. (NASDAQ:FTAI), Flex and iRhythm Technologies. FTAI owns and maintains commercial jet engines, with a focus on the maintenance, repair and exchange of CFM56 and V2500 engines. We began exiting the position as valuation increasingly reflected optimistic assumptions around the company’s longer term opportunity to supply repurposed aircraft engines for data center power generation through FTAI Power. While we view this as a potentially interesting profit cycle driver over time, we expect the path to realization is unlikely to be linear and may involve periods of volatility along the way.”
FTAI Aviation Ltd. (NASDAQ:FTAI) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 56 hedge fund portfolios held FTAI Aviation Ltd. (NASDAQ:FTAI) at the end of the first quarter, the same as in the previous quarter. While we acknowledge the risk and potential of FTAI Aviation Ltd. (NASDAQ:FTAI) 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 FTAI Aviation Ltd. (NASDAQ:FTAI) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered FTAI Aviation Ltd. (NASDAQ:FTAI) and shared Tourlite Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.
