| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 15.97% | 39.04% | 38.43% |
Lord Abbett Developing Growth Fund returned 39.04% in Q2 2026, significantly outperforming the Russell 2000 Growth Index's 25.71% return. The fund's outperformance was driven by strong security selection in Information Technology, particularly semiconductor connectivity company Astera Labs, and Industrials, led by construction services firm Sterling Infrastructure. The manager maintains high conviction in AI-related opportunities across semiconductors, cloud infrastructure, and industrial companies enabling AI factory expansion and power infrastructure. Defense and space technology represents an emerging area of excitement, with AI driving an inflection in autonomous systems within this historically low-growth sector. While the manager believes earnings growth can carry markets higher over the year, they emphasize near-term selectivity given rising private credit risks, oil shock concerns, and AI disruption fears. The portfolio favors quality companies with secular growth, durable competitive advantages, strong cash flows, and balance sheets supporting continued investment, while avoiding businesses burdened by leverage, cyclicality, or aggressive AI assumptions. The fund's top holdings reflect this quality-growth focus across semiconductors, industrials, and healthcare.
The fund pursues high-conviction growth opportunities in small-cap companies with secular tailwinds, focusing on AI infrastructure and applications, defense technology inflection, and quality businesses with strong competitive positions and capital allocation discipline.
The manager believes earnings growth can carry the market higher over the course of the year, but near-term selectivity is warranted given the complex setup after a strong recovery. Innovation continues to flourish across many areas, creating opportunities in quality companies with secular growth drivers, particularly in AI-related semiconductors, industrial companies enabling AI infrastructure, defense and space technology, and areas benefiting from AI adoption including cloud, e-commerce, and select non-technology sectors. The tone is constructive but cautious, emphasizing the need for disciplined active management and quality focus rather than broad risk-taking.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 23 2026 | 2026 Q2 | ABVX, ALAB, MIHI, STRL | AI, Cloud, defense, growth, Infrastructure Spending, private credit, semiconductors, small caps | - | Lord Abbett Developing Growth Fund delivered 39% returns in Q2 2026, crushing its benchmark through concentrated bets on AI infrastructure, semiconductors, and defense technology. The manager sees earnings growth driving markets higher but demands selectivity, favoring quality companies with secular tailwinds and strong balance sheets over leveraged cyclicals. AI adoption across semiconductors, cloud, and industrials remains the core thesis, with defense technology emerging as a new conviction area. |
| May 11 2026 | 2026 Q1 | FIX, MP, RDDT, TERN | AI, Biotechnology, growth, healthcare, industrials, small cap, technology | - | Lord Abbett's small-cap growth fund outperformed by 237bp despite AI disruption headwinds. Strong security selection in Industrials offset Communication Services weakness. Fund maintains constructive earnings-driven outlook while emphasizing selectivity given geopolitical tensions and credit risks. Portfolio focuses on AI-enabled innovation across semiconductors, defense technology, and industrial automation with quality bias toward cash-generative, well-managed companies. |
| Feb 25 2026 | 2025 Q4 | BBIO, CELH, CRDO, CRS, FIX, GH, KTOS, LRN, MDGL, MOD, RDDT, RKLB, WGS | AI, growth, Health Care, industrials, innovation, small caps, technology | - | Lord Abbett's small-cap growth fund outperformed in Q4 2025, driven by strong Health Care and Industrials selections. The manager sees continued secular bull market for innovative growth stocks, supported by Fed rate cuts, broadening earnings, and AI productivity gains. Focus remains on quality companies across AI, defense, space technology, and datacenter infrastructure themes. |
| Oct 15 2025 | 2025 Q3 | ALAB, BROS, CRDO, FIX, GH, GWRE, INSM, KTOS, MTZ, RDDT, RMBS, SFM | AI, defense, growth, industrials, semiconductors, small caps, technology |
ASTR US KRAT US CSU US |
Lord Abbett's small-cap growth fund outperformed in Q3 2025, driven by AI semiconductor and industrial infrastructure plays. The manager sees a continuing secular bull market supported by Fed dovishness, broadening earnings, and AI productivity gains. Focus remains on quality companies in AI, defense technology, and datacenter infrastructure despite ongoing policy uncertainty. |
| Jul 15 2025 | 2025 Q2 | ALAB, BROS, CRDO, FIX, GH, GWRE, INSM, KTOS, MTZ, RDDT, RMBS, SFM | AI, defense, growth, semiconductors, small caps, technology | - | Lord Abbett's small-cap growth fund outperformed in Q3 2025, driven by AI semiconductor and industrial infrastructure plays. The manager sees a continuing secular bull market for innovative growth stocks, supported by Fed dovishness, broadening earnings, and AI productivity gains. Focus remains on quality companies in AI, defense technology, and datacenter infrastructure despite ongoing policy uncertainty. |
| Sep 30 2024 | 2024 Q3 | ADMA, CAVA, CYBR, FIX, FROG, GKOS, LOAR, PIPR, RXST, SG, TMDX, VRNS, ZETA | AI, Biotechnology, Cloud, growth, healthcare, infrastructure, small cap, technology | - | Lord Abbett's small-cap growth fund underperformed in Q3 but maintains conviction in AI, cloud computing, medical innovation, and infrastructure themes. Management sees receding inflation pressure enabling Fed cuts while economic growth continues, expecting small-caps to outperform after prolonged underperformance with ample opportunities in secular growth areas. |
| Jun 30 2024 | 2024 Q2 | AVAV, CAMT, CAVA, CYBR, FIX, FRPT, INSP, NTRA, ONTO, RXST, SAIA, WING | AI, consumer, growth, healthcare, infrastructure, small cap, technology | - | Lord Abbett's small-cap growth fund outperformed in Q2 2024, driven by strong stock selection in consumer and technology names. The manager sees inflation headwinds fading and expects small-caps to outperform after extended underperformance. Key themes include AI emergence, infrastructure reinvestment, and medical innovation, with the fund finding ample opportunities across companies exhibiting strong fundamentals. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe manager is actively invested in AI infrastructure and applications across semiconductors, cloud, and industrial sectors. They highlight pioneering Gen AI semiconductor companies and industrial companies enabling AI factory expansion and power infrastructure. AI is also benefiting cloud, e-commerce, mobility, search, social networks, and non-technology sectors including Communication Services, Consumer, and Health Care. |
Semiconductors Cloud Infrastructure Gen AI Data Centers |
DefenseThe manager expresses excitement about AI's role in the emerging defense and space technology sector. They note this historically low-growth area is seeing an inflection in autonomous software and hardware systems, representing a positive shift in the sector's growth trajectory. |
Space Autonomous Systems Software Hardware | |
SemiconductorsSemiconductor connectivity companies were a key contributor to performance, with Astera Labs specifically highlighted. The manager continues to find opportunities in pioneering Gen AI semiconductor companies and maintains exposure to multiple semiconductor names in the top holdings including SiTime, MACOM, Semtech, and Nova. |
Connectivity Gen AI Semi Equipment Memory | |
Infrastructure SpendingThe manager holds significant positions in construction and infrastructure services companies, with Sterling Infrastructure representing 2.5% of the portfolio and contributing to relative performance. Industrial companies enabling AI factory expansion and power infrastructure are highlighted as favored areas. |
Construction Power Infrastructure Industrial AI Factory | |
CloudCloud is identified as an area benefiting from the positive inflection driven by AI innovation. The manager holds DigitalOcean Holdings at 2.2% of the portfolio, indicating active exposure to cloud infrastructure providers. |
Cloud Infrastructure SaaS Data Centers | |
Private CreditThe manager identifies rising private credit risks as one of the complex challenges facing today's market setup. This is mentioned alongside oil shocks and AI disruption fears as risks that aren't easily unwound, with market indicators showing more complacency than fear around these issues. |
Credit Stress Risk Leverage | |
| 2026 Q1 |
AIThe fund sees AI as a key innovation driver across multiple sectors. They are excited about pioneering Gen AI companies in semiconductors, industrial companies enabling AI factory expansion, and AI's role in defense and space technology. AI is also benefiting cloud, e-commerce, mobility, search, and social networks. |
Semiconductors Defense Cloud Infrastructure |
DefenseThe fund is excited about AI's role in the emerging defense and space technology sector, describing it as a historically low growth area seeing an inflection in autonomous software and hardware systems. |
Space Autonomous Software Hardware | |
BiotechnologyThe fund holds multiple biotech positions including Terns Pharmaceuticals, Madrigal Pharmaceuticals, and BridgeBio Pharma. Terns was noted as a contributor to performance despite health care sector selection being a net detractor. |
Pharmaceuticals Clinical Healthcare | |
| 2025 Q4 |
TechnologyFund invests at least 80% of net assets in technology companies across multiple sub-industries including IT consulting, internet services, application software, communications equipment, semiconductors, and interactive media. Portfolio focuses on companies with sector-leading cash flows, attractive valuations, and sustainable profitability prospects. |
Software Hardware Semiconductors Internet Communications |
| 2025 Q3 |
AIGenerative artificial intelligence continues to provide market tailwinds with productivity gains across sectors. AI is flourishing in semiconductors and software companies, as well as enabling datacenter expansion and power infrastructure. The emerging defense and space technology sector benefits from AI's role in autonomous software and hardware systems. |
Semiconductors Software Data Centers Defense Productivity |
DefenseThe defense and space technology sector is experiencing a positive inflection as a historically low growth area sees advancement in autonomous software and hardware systems driven by AI capabilities. |
Space Autonomous Systems Defense Electronics Government IT | |
Data CentersIndustrial companies are enabling datacenter expansion and power infrastructure to support the growing artificial intelligence ecosystem and computing demands. |
Power Infrastructure Industrial Cloud Infrastructure | |
| 2025 Q2 |
AIGenerative artificial intelligence continues to provide market tailwinds and productivity gains. The fund is finding opportunities in pioneering Gen AI companies in semiconductors and software, as well as industrial companies enabling datacenter expansion and power infrastructure to support AI growth. |
Semiconductors Software Data Centers Productivity |
DefenseThe defense and space technology sector is experiencing a positive inflection as a historically low growth area sees advancement in autonomous software and hardware systems. AI is playing a key role in this emerging sector transformation. |
Space Autonomous Software Hardware | |
CloudCloud computing has benefited from the positive inflection driven by AI adoption, contributing to the broader technology sector growth and innovation themes the fund is pursuing. |
Computing Technology Innovation | |
| 2024 Q3 |
AIThe fund identifies generative artificial intelligence as one of their favorite investment areas that appears ready to re-accelerate growth in 2024 and beyond. They view the emergence of generative AI as creating ample opportunities across the market cap spectrum. |
Artificial Intelligence Generative AI Technology Growth Innovation |
CloudCloud computing is highlighted as one of the fund's favorite investment areas with ample opportunities for growth acceleration. The fund sees cloud computing as part of the broader technology infrastructure that supports above-average revenue and earnings growth. |
Cloud Computing Software Infrastructure Technology SaaS | |
Data CentersThe fund identifies an industrial infrastructure reinvestment cycle driven by datacenter investments as a key growth theme. This is part of their broader infrastructure investment thesis that includes electric grid and supply chain reshoring. |
Data Centers Infrastructure Industrial Technology Investment | |
CybersecurityThe fund holds CyberArk Software as their second-largest position at 2.2% weight, indicating significant conviction in the cybersecurity theme. This represents their focus on technology companies with strong growth prospects. |
Cybersecurity Software Security Technology Enterprise | |
BiotechnologyThe fund emphasizes revolutionary advances in medical treatments as one of their favorite investment areas. They hold multiple healthcare positions including TransMedics Group, Glaukos Corp, and ADMA Biologics, representing significant exposure to medical innovation. |
Biotechnology Medical Devices Healthcare Innovation Treatment | |
| 2024 Q2 |
AIThe fund sees the emergence of generative artificial intelligence as one of their favorite areas ready to re-accelerate growth. They view AI as part of the broader innovation cycle they are targeting for investment opportunities. |
Artificial Intelligence Generative AI Innovation Technology Growth |
Data CentersThe fund identifies an industrial infrastructure reinvestment cycle driven by datacenter needs as a key investment theme. This is part of their focus on infrastructure spending and technological advancement. |
Infrastructure Technology Infrastructure Industrial Reinvestment Growth | |
OnshoringSupply chain reshoring is highlighted as part of the industrial infrastructure reinvestment cycle the fund is targeting. This represents a structural shift in how companies approach manufacturing and supply chain management. |
Supply Chain Manufacturing Infrastructure Industrial Reshoring |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 15, 2025 | Fund Letters | F. Thomas O'Halloran | ASTR US | Astera Labs, Inc. | Other | Semiconductors | Bull | NASDAQ | AI, Connectivity, data centers, growth, hyperscalers, Margins, semiconductors | Login |
| Oct 15, 2025 | Fund Letters | F. Thomas O'Halloran | KRAT US | Kratos Defense & Security Solutions, Inc. | Other | Aerospace & Defense | Bull | NASDAQ | AI, Autonomy, Contracts, Defense, Drones, growth, Military | Login |
| Oct 15, 2025 | Fund Letters | F. Thomas O'Halloran | CSU US | Comfort Systems USA, Inc. | Information Technology | Engineering & Construction | Bull | NYSE | AI, construction, Electrification, growth, HVAC, infrastructure, Margins | Login |
| TICKER | COMMENTARY |
|---|---|
| ALAB | Security selection within Information Technology sector contributed to relative performance over the period, driven by an overweight allocation to Astera Labs, Inc. (0.9%), a semiconductor connectivity company. |
| STRL | Although security selection within the Industrials sector contributed to relative performance over the period, driven by an allocation to Sterling Infrastructure, Inc. (2.7%), a construction and infrastructure services company. |
| ABVX | Security selection within the Health Care sector detracted from relative performance over the period, driven by an overweight allocation to Abivax SA Sponsored ADR (0.7%), a clinical-stage biotechnology company. |
| MIHI | Security selection within the Financials sector also detracted from relative performance, driven by an allocation to Miami International Holdings, Inc. (1.0%), a financial exchange operator. |
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