Aristotle Capital Boston, LLC, an investment advisor, released its first-quarter 2026 investor letter for “Small Cap Equity Fund”. A copy of the letter is available to download here. U.S. small-cap equities delivered strong performance in the first quarter amid macroeconomic and geopolitical volatility, outpacing large-cap stocks. Improving earnings, attractive relative valuations, and a focus on domestic sectors supported the small caps in the quarter. In this backdrop, the Aristotle Small Cap Equity Fund (Class I-2) delivered a total return of 1.50% in the quarter, outperforming the Russell 2000 Index’s 0.89% return. The performance was supported by security selection in the information technology and financials sectors, along with underweight allocations to healthcare and industrials. The fund remains optimistic about the long-term outlook for U.S. small-cap equities. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Aristotle Small Cap Equity Fund highlighted Advanced Energy Industries, Inc. (NASDAQ:AEIS) as one of its leading contributors. Advanced Energy Industries, Inc. (NASDAQ:AEIS) is a leading precision power conversion, measurement, and control solutions provider for semiconductor equipment and data centers. On May 21, 2026, Advanced Energy Industries, Inc. (NASDAQ:AEIS) stock closed at $313.05 per share. One-month return of Advanced Energy Industries, Inc. (NASDAQ:AEIS) was -18.15%, and its shares gained 170.01% over the past 52 weeks. Advanced Energy Industries, Inc. (NASDAQ:AEIS) has a market capitalization of $12.52 billion.
Aristotle Small Cap Equity Fund stated the following regarding Advanced Energy Industries, Inc. (NASDAQ:AEIS) in its Q1 2026 investor letter:
“Advanced Energy Industries, Inc. (NASDAQ:AEIS) is a provider of power electronics conversion products. The stock extended a strong multi-quarter rally fueled by earnings revisions, AI-related infrastructure spending, and improving semiconductor capital expenditure trends. We maintain our position, as we believe the company’s exposure to AI-driven semiconductor and data-center demand should continue to drive shareholder value.”
Advanced Energy Industries, Inc. (NASDAQ:AEIS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 27 hedge fund portfolios held Advanced Energy Industries, Inc. (NASDAQ:AEIS) at the end of the fourth quarter, compared to 28 in the previous quarter. While we acknowledge the potential of Advanced Energy Industries, Inc. (NASDAQ:AEIS) 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.
