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 highlighted stocks like Guidewire Software, Inc. (NYSE:GWRE). Guidewire Software, Inc. (NYSE:GWRE) is a leading provider of cloud-based software for property and casualty (P&C) insurance companies. On June 4, 2026, Guidewire Software, Inc. (NYSE:GWRE) stock closed at $151.17 per share. Guidewire Software, Inc. (NYSE:GWRE) delivered a 9.19% return in the past month, and its shares lost 40.90% over the past twelve months. Guidewire Software, Inc. (NYSE:GWRE) has a market capitalization of $12.85 billion.
Artisan Small Cap Fund stated the following regarding Guidewire Software, Inc. (NYSE:GWRE) in its Q1 2026 investor letter:
“The largest detractors in Q1 included Compass, ServiceTitan and Guidewire Software, Inc. (NYSE:GWRE). Guidewire, a market leader in software for the property and casualty insurance industry, detracted for a second consecutive quarter amid software industry pressures. Despite concerns about AI’s potential impact on traditional software as a service business models, the company delivered results and guidance above expectations. We trimmed the position on valuation in the second half of last year but began rebuilding the position during the quarter, supported by improved valuation and confidence in the company’s long-term profit-cycle outlook.”
Guidewire Software, Inc. (NYSE:GWRE) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 52 hedge fund portfolios held Guidewire Software, Inc. (NYSE:GWRE) at the end of the first quarter, compared to 69 in the previous quarter. While we acknowledge the risk and potential of Guidewire Software, Inc. (NYSE:GWRE) 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 Guidewire Software, Inc. (NYSE:GWRE) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Guidewire Software, Inc. (NYSE:GWRE) and shared the list of best and cheap stocks to buy. 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.
