Spyglass Capital Management LLC, an investment management firm, released its second-quarter investor letter for “Spyglass Growth Strategy”. A copy of the letter can be downloaded here. Spyglass Growth Strategy appreciated 24.63% in the second quarter, significantly outperforming the Bloomberg Midcap Growth Index’s 14.05% increase, the Bloomberg 2500 Growth Index’s 19.01% gain, and the Bloomberg 500 Index’s 15.61% return for the same period. The Strategy’s performance in Q2 was a reversal from Q2 driven by easing geopolitical tensions, notably a US-Iran ceasefire, declining oil prices, and a rebound in software stocks after early-year volatility. Small caps and growth stocks outperformed, with Technology, Industrials, and Financials leading sectors. The portfolio’s earnings growth remains above 40%, while current valuations do not yet reflect this performance. Despite recent portfolio success—85% of companies exceeding revenue estimates—the overall portfolio faces multiple compression with a slight negative year-to-date return. However, the firm remains confident that fundamentals will prevail over volatility, emphasizing that the market’s short-term inefficiencies may present opportunities for value extraction. In addition, please check the Firm’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, the Spyglass Growth Strategy noted QXO, Inc. (NYSE:QXO) as a new portfolio addition, highlighting its strong growth potential and improving margins despite short-term challenges. QXO, Inc. (NYSE:QXO) is a leading US-based roofing, waterproofing, and complementary building products distributor. On July 30, 2026, QXO, Inc. (NYSE:QXO) closed at $13.46 per share, reflecting a market capitalization of $13.96 billion. QXO, Inc. (NYSE:QXO) posted a one-month return of -16.96%, while its shares lost 30.37% over the past 52 weeks.
Spyglass Growth Strategy stated the following regarding QXO, Inc. (NYSE:QXO) in its Q2 2026 investor update:
“QXO, Inc. (NYSE:QXO), a distributor of roofing, waterproofing and complementary building products, was a bottom contributor during the second quarter. Following our entry point in April, QXO announced it would acquire TopBuild, the largest distributor and installer of insulation and related building products in North America, for $17 billion. We believe this deal, financed through QXO stock and debt, led to investor concerns around the Company’s capital structure and integration risk.
QXO, Inc. (QXO), a distributor of roofing, waterproofing and complementary building products, was a new position during the second quarter. The Company’s business is split approximately evenly between repair/remodeling and new construction. We believe this mix underpins durable demand for years to come. We also see QXO benefitting from tailwinds like structural housing undersupply, aging stock, demand for energy efficiency, and the datacenter buildout.
We believe QXO holds significant competitive advantages from its national scale combined with local execution, supplier procurement leverage, and an embedded daily job site presence. We also appreciate that the Company is seemingly intent on applying technological best practices in what we consider to be an under-digitized industry, which we think will help further widen its moat over local distributors…” (Click here to read the full text)
QXO, Inc. (NYSE:QXO) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 65 hedge fund portfolios held QXO, Inc. (NYSE:QXO) at the end of the first quarter, up from 63 in the previous quarter. While we acknowledge the risk and potential of QXO, Inc. (NYSE:QXO) 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 QXO, Inc. (NYSE:QXO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered QXO, Inc. (NYSE:QXO) and shared Alger Capital Appreciation Fund’s views on the company. 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.
