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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, Alger Small Cap Focus Fund. This analysis is provided for institutional research purposes only and is not investment advice.
"The Alger Small Cap Focus Fund delivered 31.4% in Q2 2026, outperforming its benchmark by 570 basis points. AI infrastructure drove performance as the fund capitalized on accelerating investment in data center compute capacity, with Nebius Group and Credo Technology as top contributors."
The Alger Small Cap Focus Fund returned 31.4% in Q2 2026, outperforming the Russell 2000 Growth Index's 25.7% return. The fund's performance was driven by strong contributions from AI infrastructure holdings as artificial intelligence investment accelerated during the quarter, with record capital spending flowing into processors, memory, cooling systems, and power generation. The manager views AI as entering its agentic phase where systems autonomously execute tasks and make decisions, accelerating demand for compute capacity across the data center ecosystem. Top contributors included Nebius Group, which announced a 1.2 gigawatt data center campus, and Credo Technology Group, which benefits from growing connectivity challenges in AI data centers. Guardant Health also contributed positively after raising full-year guidance and gaining regulatory approvals. Detractors included GeneDx, which missed revenue expectations on softer reimbursement rates, and Karman Holdings, which faced near-term concerns including an earnings shortfall and auditor change. The fund maintains concentrated exposure to AI infrastructure, precision oncology diagnostics, and defense technology, with the largest sector weightings in Health Care and Industrials.
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