Investment management company Vulcan Value Partners recently released its second-quarter 2026 investor letter. A copy of the letter can be downloaded here. Vulcan Value Partners prioritizes long-term returns and lower risk over short-term performance. In the quarter, the Large Cap Composite (Net) returned 9.5%, the Small Cap Composite (Net) returned 13.3%, the Focus Composite (Net) returned 10.4%, the Focus Plus Composite (Net) returned 10.5%, and the All-Cap Composite (Net) returned 9.0%. The firm reported strong compounding across its strategies in Q2 2026. Management highlighted that their exceptional holdings remain deeply undervalued relative to “what is working” in the market, viewing this as an excellent opportunity for patient investors. In addition, please check the Firm’s top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, Vulcan Value Partners highlighted Alphabet Inc. (NASDAQ:GOOG) as a leading performance contributor. Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services, including online search and advertising, cloud solutions, and artificial intelligence. On July 30, 2026, Alphabet Inc. (NASDAQ:GOOG) closed at $333.68 per share, reflecting a market capitalization of $4.08 trillion. Alphabet Inc. (NASDAQ:GOOG) posted a one-month return of -6.32%, while its shares gained 75.67% over the past 52 weeks.
Vulcan Value Partners stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q2 2026 investor update:
“Alphabet Inc. (NASDAQ:GOOG) delivered robust results during the first quarter. Core Google Search revenue accelerated to 19%, the fastest growth in 16 quarters. AI continues to be an expansionary moment for search as search queries are at an all-time high. Google Cloud revenue growth accelerated to 63%, the fastest growth rate it has ever reported. Google Cloud margins expanded to 33%, up from 18% in the first quarter of 2025. Google Cloud backlog grew 5X year-over-year with growth driven by enterprise AI offerings and TPU sales. While we have always had high expectations for Google’s Cloud business, its performance over the last several years has simply been astonishing. Google Cloud is now roughly 40% of our value for the company. As a reminder, 2023 was the first year that Google Cloud posted positive EBIT. Consensus estimates for Google Cloud 2027 EBIT are $54BN, a stark contrast to the negative EBIT margin business at $26BN of revenue in 2022. Thomas Kurian, CEO of Google Cloud, and Alphabet’s entire leadership team deserve a round of applause. We continue to monitor the AI disruption risks across all of our portfolio companies and MVP businesses.”
