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 Penumbra, Inc. (NYSE:PEN). Penumbra, Inc. (NYSE:PEN) is a medical device manufacturer that offers peripheral thrombectomy products. On June 4, 2026, Penumbra, Inc. (NYSE:PEN) closed at $320.63 per share. One-month return of Penumbra, Inc. (NYSE:PEN) was -0.50%, and its shares gained 23.84% over the past 52 weeks. Penumbra, Inc. (NYSE:PEN) has a market capitalization of $12.61 billion.
Artisan Small Cap Fund stated the following regarding Penumbra, Inc. (NYSE:PEN) in its Q1 2026 investor letter:
“We ended our investment campaigns in Penumbra, Inc. (NYSE:PEN), JBT Marel and Parsons during the quarter. Penumbra, a medical device company specializing in minimally invasive technologies to treat vascular conditions, was harvested following Boston Scientific’s January announcement to acquire the company. We had been building the position throughout 2025 as adoption of Penumbra’s core product portfolio expanded and clinical momentum improved across key indications. The acquisition validated our investment thesis and provided an attractive opportunity to take profits.”
Penumbra, Inc. (NYSE:PEN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 62 hedge fund portfolios held Penumbra, Inc. (NYSE:PEN) at the end of the first quarter, up from 42 in the previous quarter. While we acknowledge the risk and potential of Penumbra, Inc. (NYSE:PEN) 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 Penumbra, Inc. (NYSE:PEN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Penumbra, Inc. (NYSE:PEN) and shared Artisan Small Cap Fund insights on the company in the previous quarter. 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.
