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Aristotle Capital Management, LLC, an investment management company, released its “Value Equity Fund” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. During the first quarter, the U.S. equity market declined, with the S&P 500 Index falling by 4.33%. The fixed-income sector also saw a downturn; the Bloomberg U.S. Aggregate Bond Index fell by 0.05%. In terms of investment styles, the value outperformed growth. Macroeconomic conditions indicated a slowdown in growth while inflationary pressures persisted. Additionally, geopolitical events contributed to heightened volatility during this period. For the first quarter of 2026, the Aristotle Value Equity Fund (Class I-2) recorded a total return of -2.23%, underperforming the Russell 1000 Value Index’s return of 2.10% but outperforming the S&P 500 Index’s return of -4.33%. In this challenging environment, the firm remains focused on what it considers to be more assessable and sustainable: the long-term fundamentals of individual businesses. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Aristotle Value Equity Strategy highlighted QUALCOMM Incorporated (NASDAQ:QCOM). QUALCOMM Incorporated (NASDAQ:QCOM) is a semiconductor and communication technology company focusing on the development and commercialization of foundational technologies for the wireless industry. On May 6, 2026, QUALCOMM Incorporated (NASDAQ:QCOM) closed at $192.57 per share. One-month return of QUALCOMM Incorporated (NASDAQ:QCOM) was 50.74%, and its shares gained 32.72% over the past 52 weeks. QUALCOMM Incorporated (NASDAQ:QCOM) has a market capitalization of $202.97 billion.
Aristotle Value Equity Strategy stated the following regarding QUALCOMM Incorporated (NASDAQ:QCOM) in its Q1 2026 investor letter:
"QUALCOMM Incorporated (NASDAQ:QCOM), a leading semiconductor and communications technology company, was one of the largest detractors for the quarter. Despite delivering record revenues during the period, the company guided to lower near-term results due to memory related supply constraints. Results were impacted by higher memory prices, driven in part by strong demand for AI-related data center applications. This is constraining smartphone production despite otherwise healthy underlying demand and leading handset manufacturers to adopt more cautious production and inventory strategies, reducing near-term chip orders for Qualcomm. We view these headwinds as cyclical rather than structural. Qualcomm has retained its high market share in handsets, even as large clients (most notably Apple) continue to pursue insourcing initiatives, which we believe is a testament to its history of productive research and development (R&D) spending and technological leadership. Qualcomm also continues to execute on its long-term strategy of evolving from a handset centric company into a broader connected computing platform. Automotive, Internet of Things (IoT) and newer initiatives, such as AI-enabled PCs and edge inference processors, represent a growing portion of the company, with management targeting roughly half of chip revenue from non-handset applications by the end of the decade. We believe Qualcomm’s technologies will continue to benefit as connectivity expands across devices and as AI workloads increasingly shift from the cloud to on-device (the edge), supporting its ability to generate strong FREE cash flow over time."
QUALCOMM Incorporated (NASDAQ:QCOM) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 78 hedge fund portfolios held QUALCOMM Incorporated (NASDAQ:QCOM) at the end of the fourth quarter, up from 63 in the previous quarter. In the second quarter of fiscal 2026, QUALCOMM Incorporated (NASDAQ:QCOM) reported revenues of $10.6 billion and non-GAAP earnings per share of $2.65. While we acknowledge the potential of QUALCOMM Incorporated (NASDAQ:QCOM) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
In another article, we covered QUALCOMM Incorporated (NASDAQ:QCOM) and shared the list of most promising AI stocks to invest in. 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.