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 mentioned stocks like IRhythm Holdings, Inc. (NASDAQ:IRTC). IRhythm Holdings, Inc. (NASDAQ:IRTC) is a digital healthcare company that provides Zio ambulatory cardiac monitoring services. On June 4, 2026, IRhythm Holdings, Inc. (NASDAQ:IRTC) closed at $107.35 per share. One-month return of IRhythm Holdings, Inc. (NASDAQ:IRTC) was -11.03%, and its shares lost 26.81% over the past 52 weeks. IRhythm Holdings, Inc. (NASDAQ:IRTC) has a market capitalization of $3.53 billion.
Artisan Small Cap Fund stated the following regarding IRhythm Holdings, Inc. (NASDAQ:IRTC) in its Q1 2026 investor letter:
“IRhythm Holdings, Inc. (NASDAQ:IRTC) provides Zio wearable cardiac monitoring devices that help physicians diagnose arrhythmias associated with elevated stroke risk. We further reduced our position, consistent with last quarter’s trims, following the stock’s strong 2025 performance, driven by company-specific profit-cycle tailwinds and market share gains after a competitor disruption, which are unlikely to recur in 2026. While we have taken profits and reduced the position size back into our GardenSM, ahead of a potential lull in the 2026 profit cycle, we remain constructive on the long-term potential and are looking for the right opportunity to reverse course and potentially build the position again.”
IRhythm Holdings, Inc. (NASDAQ:IRTC) 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 IRhythm Holdings, Inc. (NASDAQ:IRTC) at the end of the first quarter, compared to 44 in the previous quarter. While we acknowledge the risk and potential of IRhythm Holdings, Inc. (NASDAQ:IRTC) 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 IRhythm Holdings, Inc. (NASDAQ:IRTC) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered IRhythm Holdings, Inc. (NASDAQ:IRTC) and shared the list of best medical device stocks to invest in. 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.
