Diamond Hill Capital, a First Eagle Investment Management company, issued its Q3 2026 investor letter for its “Large Cap Strategy”. The letter can be downloaded here. The Strategy returned 3.18% (net of fees) in the quarter, outperforming the 2.61% return of the Russell 1000 Value Index. Key positive contributors included stock selection in information technology, an underweight in utilities, and an overweight in energy, while detractors were found in industrials, health care, and consumer staples. Looking ahead, the firm anticipates below-average returns due to high equity market valuations, although attractive bottom-up investment opportunities remain. Notably, software and legacy technology stocks outperformed in Q3 2026, despite recent index exclusions; some AI-related stocks that had boosted the index previously underperformed. Additionally, reviewing the Strategy’s top five holdings provides insight into its best positions for 2026.
In its Q3 2026 investor letter, Diamond Hill Large Cap Strategy highlighted Gartner, Inc. (NYSE:IT) as a new portfolio addition. Gartner, Inc. (NYSE:IT) is a global research and advisory firm that delivers business and technology insights to help businesses make informed decisions. On October 16, 2026, Gartner, Inc. (NYSE:IT) closed at $205.35, with a $12.96 billion market capitalization. Gartner, Inc. (NYSE:IT) posted a 20.14% YTD pullback, trading within a 52-week range of $124.25 to $261.10.
Diamond Hill Large Cap Strategy stated the following regarding Gartner, Inc. (NYSE:IT) in its Q3 2026 investor letter:
“We initiated a position in research and advisory firm Gartner, Inc. (NYSE:IT) as concerns around slowing revenue growth and potential disruption from AI have created an opportunity to invest at an attractive valuation. While AI introduces both risks and opportunities, we believe the market is underestimating the value of a Gartner license and the company’s intermediate-term growth trajectory.”
Gartner, Inc. (NYSE:IT) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 50 hedge fund portfolios held Gartner, Inc. (NYSE:IT) at the end of the second quarter, which was 36 in the previous quarter. While we acknowledge the potential of Gartner, Inc. (NYSE:IT) 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.
