Eagle Capital Management, an investment management company, released its second quarter 2026 investor letter. A copy of the letter can be downloaded here. In the quarter, Eagle Capital Management discussed how enthusiasm around AI capital spending has driven strong S&P 500 earnings growth while also increasing risks from elevated valuations, concentrated demand, and aggressive investment assumptions.
Eagle remains a strong believer in AI but prefers constructing a portfolio that can perform across multiple outcomes rather than relying on one forecast. The firm believes current earnings can overstate underlying economics because semiconductor equipment is depreciated over several years, while free cash flow growth remains much weaker. It also expects competition and additional capacity across AI labs, hyperscalers, and semiconductors to eventually create winners and losers.
These dynamics are encouraging Eagle to recycle capital toward attractive opportunities outside the most crowded AI trades while maintaining selective exposure to high quality beneficiaries. The portfolio trades at a 20% market discount with faster expected EPS growth. Please review the Strategy's top five holdings for key selections.
In its second-quarter 2026 investor letter, Eagle Capital Management highlighted Workday, Inc. (NASDAQ:WDAY). Workday, Inc. (NASDAQ:WDAY) is a leading enterprise software company that provides cloud applications for human resources and financial management. On August 18, 2026, Workday, Inc. (NASDAQ:WDAY) closed at $190.64 per share.
One-month return of Workday, Inc. (NASDAQ:WDAY) was 43.96% and its shares gained -16.20% over the past 52 weeks. Workday, Inc. (NASDAQ:WDAY) has a market capitalization of $47.09 billion. Eagle Capital Management stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its Q2 2026 investor letter: "Software is controversial due to fears of Al-driven disruption.
Al makes it easier to build software and will change workflows in how it is used. We believe there will be heightened competition and greater separation between winners and losers over the coming years. The industry is deservedly trading at a higher risk premium, but within the market there are plenty of mispricings.
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