Baron Capital, an investment management company, released its Q2 2026 investor letter for the “Baron Asset Fund”. A copy of the letter can be downloaded here. U.S. equities reached new highs in Q2, mainly driven by a narrow group of stocks benefiting from AI advancements, particularly in the Information Technology sector, with semiconductor stocks showing remarkable performance. The Baron Asset Fund rose 18.98% in the quarter, outperforming the Russell Midcap Growth Index’s 14.55% return, driven by positive stock selection, despite challenges from underexposure to strong Beta and Momentum factors. Although the Fund’s investment strategy limited exposure to high-flying sectors, its focus on undervalued software and services is expected to yield positive returns as market leadership diversifies. Concerns about AI disruption have led to unfair stock penalties in various sectors, reflecting investor concerns about legacy business models amidst rising valuations for AI beneficiaries. Additionally, reviewing the Fund’s top five holdings could help identify its best picks for 2026.
In its Q2 2026 investor letter, Baron Asset Fund highlighted Gartner, Inc. (NYSE:IT). Established in 1979, Gartner, Inc. (NYSE:IT) is a research and advisory company that provides business and technology insights to help businesses make informed decisions. On August 13, 2026, Gartner, Inc. (NYSE:IT) closed at $183.30 per share. One-month return of Gartner, Inc. (NYSE:IT) was 30.75%, and its shares lost 23.21% over the past 52 weeks. Gartner, Inc. (NYSE:IT) has a market capitalization of $11.58 billion.
Baron Asset Fund stated the following regarding Gartner, Inc. (NYSE:IT) in its Q2 2026 investor letter:
“Syndicated research provider Gartner, Inc. (NYSE:IT) detracted from performance due to multiple compression driven by rising AI fears. We continue to own Gartner given its large addressable market, significant competitive advantage, and robust free cash flow generation, which we expect management to deploy toward ongoing, significant share repurchases at valuations that approach historically low levels.”
Gartner, Inc. (NYSE:IT) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 36 hedge fund portfolios held Gartner, Inc. (NYSE:IT) at the end of the first quarter, which was 50 in the previous quarter. While we acknowledge the risk and potential of Gartner, Inc. (NYSE:IT) 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 Gartner, Inc. (NYSE:IT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Gartner, Inc. (NYSE:IT) and shared Artisan Mid Cap Value Fund’s insight on the company from the previous quarter. 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.
