ClearBridge Investments, a global equity manager, recently published second-quarter 2026 commentary for its “Small Cap Growth Strategy”. A copy of the letter can be downloaded here. The Russell 2000 Growth Index increased by 25.6% in the second quarter, marking its third-best quarterly performance in two decades. The rally was fueled by enthusiasm for AI, strength in biotech, and gains in high-beta, high-momentum stocks, amid rising retail trading activity and narrow leadership in specific themes. Despite a complex macroeconomic backdrop and ongoing debates about the pace and impact of AI infrastructure investments, enthusiasm for generational technology investments remains robust. The Strategy achieved strong absolute returns of over 21% (gross) during the quarter but lagged the Russell 2000 Growth benchmark due to underperformance in certain healthcare and financial stocks, software challenges, and limited exposure to high-beta, high-momentum AI-related stocks. In addition, please check the Strategy’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Clearbridge Small Cap Growth Strategy highlighted Xometry, Inc. (NASDAQ:XMTR). Xometry, Inc. (NASDAQ:XMTR) is a US based artificial intelligence (AI) powered online manufacturing marketplace that helps buyers to source custom-manufactured parts. On July 23, 2026, Xometry, Inc. (NASDAQ:XMTR) closed at $86.51 per share, reflecting a market capitalization of $4.78 billion. Xometry, Inc. (NASDAQ:XMTR) posted a one-month return of -7.95%, while its shares gained 161.74% over the past 52 weeks.
Clearbridge Small Cap Growth Strategy stated the following regarding Xometry, Inc. (NASDAQ:XMTR) in its Q2 2026 investor update:
“Industrials and materials positively contributed, though results were mixed by subsectors. Beyond AI tailwinds, Xometry, Inc. (NASDAQ:XMTR), an online marketplace for on-demand manufactured parts, gained on continued acceleration in growth and profitability, as well as a new partnership with Siemens which should provide an incremental growth channel.”
Xometry, Inc. (NASDAQ:XMTR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 31 hedge fund portfolios held Xometry, Inc. (NASDAQ:XMTR) at the end of the first quarter, up from 30 in the previous quarter. While we acknowledge the risk and potential of Xometry, Inc. (NASDAQ:XMTR) 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 Xometry, Inc. (NASDAQ:XMTR) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Xometry, Inc. (NASDAQ:XMTR) and shared the list of stocks Jim Cramer discussed. 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.
