Wasatch Global Investors, an asset management company, released its “Small Cap Growth Strategy” Q1 2026 investor letter. A copy can be downloaded here. The Wasatch Small Cap Growth Strategy lagged the benchmark, Russell 2000® Growth Index, in the quarter, which returned -2.81%. U.S. small-cap stocks were volatile in the quarter, due to shifting investor sentiment. Enthusiasm for artificial intelligence continued to support infrastructure buildout companies, but it triggered sell-offs in stocks of industries deemed vulnerable to AI disruption. Geopolitical tensions further contributed to the market swings. In this volatile environment, the firm remains focused on identifying companies with sustainable competitive advantages. In addition, you can check the Fund’s top 5 holdings for its best picks for 2026.
In its first-quarter 2026 investor letter, Wasatch Small Cap Growth Strategy highlighted Agilysys, Inc. (NASDAQ:AGYS). Agilysys, Inc. (NASDAQ:AGYS) is a leading hospitality-focused technology company that develops and markets software-enabled solutions and services. On June 19, 2026, Agilysys, Inc. (NASDAQ:AGYS) closed at $87.51 per share. One-month return of Agilysys, Inc. (NASDAQ:AGYS) was 9.61%, and its shares lost 19.34% over the past 52 weeks. Agilysys, Inc. (NASDAQ:AGYS) has a market capitalization of $2.46 billion.
Wasatch Small Cap Growth Strategy stated the following regarding Agilysys, Inc. (NASDAQ:AGYS) in its Q1 2026 investor letter:
“Another company that saw its stock price decline amid AI disruption concerns was Agilysys, Inc. (NASDAQ:AGYS), a provider of property management and point-of-sale software for the hospitality industry. Here, too, we believe the business model is more resilient than market participants anticipate. Property management systems are difficult to replace, and contracts are often long term, frequently extending 10 years or more. Given this contract stickiness and Agilysys’ niche expertise, we believe customers will look to the company to incorporate AI functionality into its existing platform rather than develop solutions independently. We also believe Agilysys is positioned to accelerate earnings and free cash flow growth from the implementation of its contract with Marriott International, Inc.”
Agilysys, Inc. (NASDAQ:AGYS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 18 hedge fund portfolios held Agilysys, Inc. (NASDAQ:AGYS) at the end of the first quarter, compared to 24 in the previous quarter. In the fourth quarter of fiscal 2026, Agilysys, Inc. (NASDAQ:AGYS) reported record revenue of $82.9 million, marking an increase of 11.7% from prior year. While we acknowledge the risk and potential of Agilysys, Inc. (NASDAQ:AGYS) 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 AGILYSYS, INC. (NASDAQ:AGYS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Agilysys, Inc. (NASDAQ:AGYS) and shared the list of technology stocks offering more than 50% upside. 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.
