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 **** umptions. 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 2026.
In its second-quarter 2026 investor letter, Eagle Capital Management highlighted S&P Global Inc. (NYSE:SPGI). S&P Global Inc. is a financial services and **** ytics company that provides benchmarks, data, **** ytics, and workflow solutions in the global capital, energy, commodity, and automotive markets. On September 02, 2026, S&P Global Inc. closed at $431.71 per share, reflecting a market capitalization of $127.27 billion. S&P Global Inc. posted a one‑month return of 6.40%, while its shares lost 14.62% over the past 52 weeks.
Eagle Capital Management stated the following regarding S&P Global Inc. (NYSE:SPGI) in its Q2 2026 investor letter:
"High quality with low volatility (24% of capital): London Stock Exchange, Danaher, S&P Global Inc. (NYSE:SPGI), Mastercard, A.J. Gallagher: Approximately a quarter of Eagle's portfolio is spread across a handful of superb businesses that exhibit high and stable margins, strong returns on capital, wide competitive advantages, and well above GDP growth. We expect the group to deftly navigate the integration of AI into their markets. Most operate with a combination of oligopoly/monopoly **** ets, network effects, or regulatory moats. S&P Global owns the S&P ratings franchise, S&P Indexes, Platts, and Capital IQ.
A few years ago, these stocks were priced for perfection. Their attractive characteristics were prized, and the group traded at more than 30x earnings. Over the past five years, the businesses have grown significantly, while the stocks have de rated. Today, the group trades at a high teen multiple. In a market that is growing EPS at nearly 20%, their steady growth isn't scarce. However, as earnings in the economy normalize back towards mid businesses should demonstrate significant outperfor