Fenimore Asset Management, an investment management company, released its Q2 2026 investor letter. You can download the letter here. U.S. equity markets saw broad gains in Q2, driven by strong corporate earnings, economic resilience, and enthusiasm for artificial intelligence (AI).
Major indices reached all-time highs, though the energy sector declined. Continued earnings growth, especially among AI-related investments, supported the rally. Technology, particularly semiconductors, led performance as demand for AI infrastructure surged.
Despite macroeconomic uncertainties and interest rate influences, Fenimore remains committed to investing in high-quality businesses. The Fenimore Value Strategy achieved a 9.35% return in the quarter, underperforming the Russell Midcap Index, which returned 13.83% due to its significant exposure to AI. The fund's relative underperformance was influenced by the absence of certain positions, especially in the information technology and industrial sectors.
Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026. In its second-quarter 2026 investor letter, Fenimore Asset Management highlighted Tyler Technologies, Inc. (NYSE:TYL). Tyler Technologies, Inc. (NYSE:TYL) is a leading US-based integrated software and technology solutions provider for the public sector.
On September 17, 2026, Tyler Technologies, Inc. closed at $341.57 per share. The one-month return of Tyler Technologies, Inc. was 4.10%, and its shares lost 37.05% over the past 52 weeks. Tyler Technologies, Inc. has a market capitalization of $13.99 billion.
Fenimore Asset Management stated the following regarding Tyler Technologies, Inc. (NYSE:TYL) in its Q2 2026 investor letter: "We continued to build our position in Ryan Specialty Holdings (RYAN) and initiated new positions in Thermo Fisher Scientific (TMO) and Tyler Technologies, Inc. (NYSE:TYL). TYL is the leading software provider to state and local governments, supported by a large installed base, strong customer retention, and high switching costs. Fears around the potential impact of AI on software providers weighed on sentiment, creating an opportunity in the share price despite the mission-critical nature of TYL's solutions and the complexity of its integrations.
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