Polen Capital, an investment management company, released its second-quarter 2026 investor letter for “Polen 5Perspectives Small Growth Strategy”. A copy of the letter can be downloaded here. Polen 5Perspectives Small Growth Composite Portfolio returned 33.22% gross and 32.83% net of fees, respectively, in the second quarter of 2026, compared to the 25.71% return of the Russell 2000 Growth Index. It was an outstanding quarter for small cap stocks, defying market concerns around economic growth, trade policy, and the durability of AI investment. Ongoing debate about AI capital spending was moderated by positive announcements from hyperscalers and enterprise customers, improving investors’ confidence and increasing spending growth. The demand to build AI infrastructure is rising, impacting a broad range of companies positively, across power generation and data centers. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Polen 5Perspectives Small Growth Strategy highlighted GeneDx Holdings Corp. (NASDAQ:WGS). GeneDx Holdings Corp. (NASDAQ:WGS) is a genomics company that offers advanced exome and genome sequencing for pediatric and rare disease diagnostics. On July 16, 2026, GeneDx Holdings Corp. (NASDAQ:WGS) closed at $61.69 per share, reflecting a market capitalization of $1.83 billion. GeneDx Holdings Corp. (NASDAQ:WGS) posted a one-month return of 4.54%, while its shares lost 20.78% over the past 52 weeks.
Polen 5Perspectives Small Growth Strategy stated the following regarding GeneDx Holdings Corp. (NASDAQ:WGS) in its Q2 2026 investor update:
“The most significant detractors from the Portfolio’s relative performance in the quarter were Fastly, Credo Technology Group (not owned), and GeneDx Holdings Corp. (NASDAQ:WGS). GeneDx is a provider of genomic testing and diagnostics that leverages advanced sequencing technology to support the diagnosis of rare diseases and improve patient outcomes. While the company continues to make progress operationally, shares were volatile during the quarter driven by a material cut to 2026 guidance that caused investors to reassess growth expectations amidst broadly weakening healthcare sentiment. We exited the position during the period as our process led us to redeploy capital into opportunities where we saw a more compelling combination of thematic tailwinds, fundamentals, and technical characteristics.”
GeneDx Holdings Corp. (NASDAQ:WGS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 37 hedge fund portfolios held GeneDx Holdings Corp. (NASDAQ:WGS) at the end of the first quarter, up from 39 in the previous quarter. In Q1 2026, GeneDx Holdings Corp.’s (NASDAQ:WGS) total revenue came in $12 billion lower than anticipated, despite stronger than expected volume growth. While we acknowledge the risk and potential of GeneDx Holdings Corp. (NASDAQ:WGS) 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 GeneDx Holdings Corp. (NASDAQ:WGS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered GeneDx Holdings Corp. (NASDAQ:WGS) and shared Polen 5Perspectives Small Growth Strategy’s insights on the company in 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.
