Strong Performance from Alphabet Inc. (GOOG)
Jensen Quality Growth Equity Composite, a US-based asset management company, has released its second-quarter 2026 investor letter for the ‘Jensen Quality Growth Equity Composite’. The fund aims for long-term growth by investing in high-quality companies with durable competitive advantages. In Q2 2026, the fund returned 10.94% net of fees, trailing the 15.20% return for the S&P 500 Index. The strong performance of the US equities can be attributed to easing Iran-related tensions, improving financial conditions, resilient consumer spending, and continued AI infrastructure investment. AI and memory-related semiconductor stocks led the rally, while lower-quality and momentum stocks outperformed the quality factors central to Jensen’s strategy.
The fund’s quarterly performance benefited from favorable stock selection in Communication Services and no exposure to Energy and Utilities, while selection in Industrials and Information Technology hurt relative returns. The portfolio remains balanced across quality compounders, AI beneficiaries, and defensive businesses. In addition, please check the fund’s top five holdings to know its best picks in 2026.
Alphabet Inc. (GOOG) – A Material Performance Contributor
In its second-quarter 2026 investor letter, Jensen Quality Growth Equity Composite highlighted Alphabet Inc. (NASDAQ:GOOG) as a material performance contributor. Alphabet Inc. (NASDAQ:GOOG) is a US-based multinational technology company that offers various products and platforms. On July 24, 2026, Alphabet Inc. (NASDAQ:GOOG) closed at $319.09 per share. One-month return of Alphabet Inc. (NASDAQ:GOOG) was -4.89% and its shares gained 64.03% over the past 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of about $3.89 trillion with a 52-week trading range between $188.70 – $404.47.
Strong Cloud Growth and Easing AI Search Concerns
Jensen Quality Growth Equity Composite stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2026 investor letter: ‘Alphabet Inc. (NASDAQ:GOOG) produced strong quarterly results, reporting strong revenue, earnings, and margin growth. Underpinning these results was strong performance in the company’s cloud business, with revenue accelerating over the past several quarters, from 48% year over year (Y/Y) in Q4 to 63% Y/Y in Q1. The company also reported a significant expansion in the backlog from $240 billion as of December 31, 2025, to $462 billion as of March 31, 2026, nearly doubling.’ Additionally, Jensen believes that accelerating revenue growth in the search business over the past four quarters has materially eased investor concerns that generative AI might disintermediate the company’s traditional search business.
Investment Insights
Alphabet Inc. (NASDAQ:GOOG) ranks 7th on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 201 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter, compared to 203 in the previous quarter. In 2025, Alphabet Inc. (NASDAQ:GOOG) achieved its first-ever $400 billion annual revenue and in Q1 2026 its consolidated revenue reached $109.9 billion, up 22% or 19% in constant currency. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk.
