Fred Alger Management, an investment management company, released its “Alger Capital Appreciation Fund” second-quarter 2026 investor letter. A copy of the letter can be downloaded here. US equities strongly rebounded in the second quarter, with the S&P 500 Index rising 15.2%. Easing geopolitical tensions and technological advancements fueled market optimism, propelling the Information Technology and Industrials sectors forward, while Energy and Utilities lagged due to falling oil and gas prices. Despite discussions on AI disruption, opportunities are identified within sectors adopting the technology as it enters its agentic phase. The Alger Capital Appreciation Fund’s Class A shares outperformed the Russell 1000 Growth Index in the quarter, driven by strong performances in Information Technology and Communication Services, while Industrials and Financials detracted from overall performance. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Alger Capital Appreciation Fund highlighted IREN Limited (NASDAQ:IREN). IREN Limited (NASDAQ:IREN) is Australia-based vertically integrated data center infrastructure company. On July 15, 2026, IREN Limited (NASDAQ:IREN) closed at $38.28 per share, reflecting a market capitalization of $13.66 billion. IREN Limited (NASDAQ:IREN) posted a one-month return of -41.14%, while its shares gained 95.51% over the past 52 weeks.
Alger Capital Appreciation Fund stated the following regarding IREN Limited (NASDAQ:IREN) in its Q2 2026 investor update:
“IREN Limited (NASDAQ:IREN) develops and operates data center infrastructure originally built for bitcoin mining and increasingly focused on AI cloud services. The company is using its access to large-scale power and data center capacity to support high-performance computing workloads for artificial intelligence customers. Shares detracted from performance during the quarter as investors weighed the company’s rapid transition toward AI infrastructure against declining Bitcoin mining revenue, elevated capital needs, and execution risk tied to large data center and GPU deployments. While recent AI cloud announcements and strategic partnerships supported the long-term narrative, concerns around financing, and the pace of the business model transition pressured sentiment during the period.”
IREN Limited (NASDAQ:IREN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 53 hedge fund portfolios held IREN Limited (NASDAQ:IREN) at the end of the first quarter, up from 46 in the previous quarter. While we acknowledge the risk and potential of IREN Limited (NASDAQ:IREN) 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 IREN Limited (NASDAQ:IREN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered IREN Limited (NASDAQ:IREN) and shared the list of best growth stocks with highest upside potential. 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.
