NZS Capital, LLC, an investment management company, released its “NZS Growth Equity Strategy” second-quarter 2026 investor letter. A copy of the letter can be downloaded here. Equity markets delivered a strong performance in the second quarter of 2026, driven by demand for AI infrastructure, geopolitical stabilization, and positive earnings reports. The portfolio achieved a gross return of +24.96% and a net return of +24.76%, significantly outperforming the +14.79% return for the Morningstar Global Target Market Exposure Index. Overweight in Semiconductors, stock selection in areas like Software and Industrials, and zero exposure to Energy contributed to the Strategy’s outperformance in the quarter. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, NZS Growth Equity Strategy highlighted NVIDIA Corporation (NASDAQ:NVDA). NVIDIA Corporation (NASDAQ:NVDA) is a leading data center-scale AI infrastructure company that operates through Compute & Networking and Graphics segments. On July 20, 2026, NVIDIA Corporation (NASDAQ:NVDA) stock closed at $203.28 per share. One-month return of NVIDIA Corporation (NASDAQ:NVDA) was -2.80%, and its shares gained 18.34% over the past 52 weeks. NVIDIA Corporation (NASDAQ:NVDA) has a market capitalization of $4.95 trillion.
NZS Growth Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2026 investor update:
“Elsewhere, NVIDIA Corporation (NASDAQ:NVDA) was added back to the portfolio as a resilient position late in the quarter. NVIDIA had been a long-time holding in the portfolio before we exited in the third quarter of 2025. The stock has since lagged the broad surge in the AI semiconductor ecosystem as the market began contemplating budding risks to the GPU’s market share in AI compute. This scenario was our primary concern when we exited the position, but we now think the lowered valuation more than compensates for this type of risk. Further, NVIDIA’s growth relative to competitors indicates the GPU is actually taking share at present.”
NVIDIA Corporation (NASDAQ:NVDA) is in fourth position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 275 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the fourth quarter, compared to 264 in the previous quarter. In the first quarter of fiscal year 2027, NVIDIA Corporation (NASDAQ: NVDA) reported revenues of $82 billion, achieving an impressive 85% year-over-year growth. While we acknowledge the risk and potential of NVIDIA Corporation (NASDAQ:NVDA) 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 NVIDIA Corporation (NASDAQ:NVDA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered NVIDIA Corporation (NASDAQ:NVDA) and shared insights on its flat performance since November despite a significant increase in net income. 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.
