In the second quarter of 2026, Brown Advisory's Global Leaders Strategy reported a net return of 4.6%, lagging behind its benchmark, the MSCI ACWI Net Index, which saw a 14.9% return. This underperformance was primarily due to reduced exposure to semiconductor and technology hardware sectors, along with certain software, cloud services, and financial holdings. However, the strategy found success in its investments related to AI infrastructure, benefiting from robust demand in semiconductors and other AI-focused areas. Brown Advisory foresees a promising environment for active stock selection, with a substantial 'ready-to-buy' list reaching its highest level since the COVID-19 pandemic. The firm projects an average five-year base-case internal rate of return (IRR) of 12%-13%, while maintaining its emphasis on high-quality assets, disciplined valuation, and long-term cash flow generation.

Alphabet Inc. (NASDAQ:GOOGL), a prominent global technology firm and the parent company of Google, continues to be a key holding for the Brown Advisory Global Leaders Strategy Fund. The company, which generates most of its revenue from digital advertising, has significantly expanded its presence in cloud computing and artificial intelligence. The fund's Q2 2026 investor letter specifically praises Alphabet's performance, noting its robust full-stack capabilities across Search, Cloud, and model infrastructure. Recent financial outcomes indicate that Alphabet's substantial investments in AI are yielding positive results, and its equity raise in June, aimed at supporting AI capital expenditures and related growth, was positively received by the market.

Alphabet Inc. holds the 3rd spot on a list of the 40 most popular stocks among hedge funds as of the end of the first quarter, with 265 hedge fund portfolios holding its shares. While acknowledging the inherent risks and potential of investing in Alphabet, the investment firm maintains that some AI stocks offer even greater potential for higher and quicker returns. This perspective underscores the evolving landscape of AI investments and the continuous search for undervalued opportunities with significant upside potential, particularly those poised to benefit from broader economic trends such as onshoring initiatives.

Investing in companies like Alphabet, which are at the forefront of technological innovation, not only offers financial promise but also contributes to the advancement of society. By supporting firms that drive progress in artificial intelligence, investors can be part of a future where technology enhances various aspects of life, fostering growth and creating new opportunities for global prosperity.