ClearBridge Investments, a global equity manager, recently published second-quarter 2026 commentary for its “SMID Cap Growth Strategy”. A copy can be downloaded here. Small and mid-cap (SMID) growth equities experienced the strongest quarter in recent memory, with the Russell 2500 Growth Index rising 24.0%, driven by enthusiasm for AI infrastructure and higher-beta momentum stocks. The Strategy delivered double-digit returns in the quarter but trailed the soaring benchmark. Underperformance was driven by underexposure to top AI infrastructure stocks as well as weaknesses in healthcare and consumer discretionary sectors. The market leadership expanded beyond mega-cap technology, indicating potential opportunities from a broader cyclical recovery and AI adoption. In addition, you can check the Fund’s top five holdings to determine its best picks for 2026.
In its Q2 2026 investor letter, ClearBridge SMID Cap Growth Strategy highlighted Fabrinet (NYSE:FN). Fabrinet (NYSE:FN) is an optical packaging and precision optical, electro-mechanical, and electronic manufacturing services provider. On July 10, 2026, Fabrinet (NYSE:FN) closed at $471.13 per share, reflecting a market capitalization of $16.88 billion. Fabrinet (NYSE:FN) posted a one-month return of -25.87%, while its shares gained 58.92% over the past 52 weeks.
ClearBridge SMID Cap Growth Strategy stated the following regarding Fabrinet (NYSE:FN) in its Q2 2026 investor update:
“In IT, we added Fabrinet (NYSE:FN) to increase exposure to AI networking and data connectivity growth. Fabrinet is a leading contract manufacturer for optical communications components used in data center and telecom networks, where AI compute demand is driving a generational upcycle.”
Fabrinet (NYSE:FN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 56 hedge fund portfolios held Fabrinet (NYSE:FN) at the end of the fourth quarter, compared to 42 in the previous quarter. In third quarter of 2026, Fabrinet (NYSE:FN) reported revenue of $1.214 billion, an increase of 39% year-over-year. While we acknowledge the risk and potential of Fabrinet (NYSE:FN) 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 Fabrinet (NYSE:FN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Fabrinet (NYSE:FN) and shared the list of best optical networking stocks to buy according to analysts. 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.
