Wasatch Global Investors, an asset management company, released its “Small Cap Growth Strategy” Q2 2026 investor letter. A copy of the letter can be downloaded here. Small-cap equities experienced strong gains in the second quarter, primarily driven by companies associated with artificial intelligence (AI). However, the leadership within this sector remains narrow. Unprofitable companies and those benefiting from rapid AI-driven demand performed well. As a result, the strategy underperformed compared to the Russell 2000® Growth Index, which gained 25.71%. The strategy’s disciplined focus on higher-quality businesses caused it to trail the benchmark, though several AI-related holdings contributed positively. The strategy prioritizes companies with sustainable growth potential, emphasizing the importance of quality investments. Overall, the strategy seeks to balance the transformative potential of AI with a commitment to long-term, quality investments. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, the Wasatch Small Cap Growth Strategy highlighted Procore Technologies, Inc. (NYSE:PCOR). Procore Technologies, Inc. (NYSE:PCOR), a technology company that provides a cloud-based construction management platform and related software products, detracted from the Fund’s performance during the quarter. On July 24, 2026, Procore Technologies, Inc. (NYSE:PCOR) closed at $42.83 per share. One-month return of Procore Technologies, Inc. (NYSE:PCOR) was 9.10%, and its shares lost 44.12% over the past 52 weeks. Procore Technologies, Inc. (NYSE:PCOR) has a market capitalization of $6.46 billion.
Wasatch Small Cap Growth Strategy stated the following regarding Procore Technologies, Inc. (NYSE:PCOR) in its Q2 2026 investor update:
“Another detractor was Procore Technologies, Inc. (NYSE:PCOR), a software company that manages construction projects. Many software stocks have sold off in 2026 due to concerns about how AI might disrupt software business models. The strategy does not have large exposure to software companies. But for the companies we do hold, we believe the market has underestimated the competitive moats that insulate the business from AI disruption or the ways in which the companies might actually benefit from AI, not be disrupted by it. Procore serves as an example. Procore’s advantage lies not in its software code but in its extensive network of contractors and the proprietary data generated across thousands of projects. That network effect and dataset are significantly more difficult to replicate than the underlying software functionality, and we believe they position the company well in an AI-driven environment. AI could create more and better insights from that proprietary data.”
Procore Technologies, Inc. (NYSE:PCOR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 35 hedge fund portfolios held Procore Technologies, Inc. (NYSE:PCOR) at the end of the first quarter, compared to 45 in the previous quarter. Procore Technologies, Inc. (NYSE:PCOR) reported total revenue of $359 million in Q1 2026, marking an increase of 15.7% year-over-year. While we acknowledge the risk and potential of Procore Technologies, Inc. (NYSE:PCOR) 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 Procore Technologies, Inc. (NYSE:PCOR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Procore Technologies, Inc. (NYSE:PCOR) and shared the list of best cloud computing stocks to buy according to hedge funds. 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.
