L1 Capital, an investment management firm, released its "L1 Capital International Fund" (unhedged) second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The letter discusses the current investment environment as a 'two-speed' but resilient global economy, accompanied by an uncertain future. The letter explores the potential of an AI bubble, distinguishing between strong fundamentals and speculative momentum. Additionally, the market displays a 'narrow' character, marked by high exuberance and pronounced over-pessimism. Against this backdrop, the Fund returned +2.6% (net of fees) during the June 2026 quarter, compared to the benchmark return of +12.5% (all in A$). The underperformance was driven more by which investments were not held in the Fund. The Fund remains focused on quality, valuation and the avoidance of permanent capital loss, and believes the portfolio is positioned to deliver attractive risk-adjusted returns for patient investors. In addition, you can check the Fund's top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, L1 Capital International Fund highlighted Amazon.com, Inc. (NASDAQ:AMZN). Amazon.com, Inc. (NASDAQ:AMZN) is a multinational technology and retail company known for its leading online marketplace and cloud platform. On July 16, 2026, Amazon.com, Inc. (NASDAQ:AMZN) closed at $247.23 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was 6.20%, and its shares gained 10.51% over the past 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $2.69 trillion.
L1 Capital International Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2026 investor update:
"At an individual stock level, while the Fund had more positive contributors than negative detractors to returns, quarterly performance was again mixed. Amazon.com contributed around 1.0%. We remain excited by the outlook for Amazon.com, Inc. (NASDAQ:AMZN), both for the ecommerce business and Amazon Web Services (AWS). Operational execution within ecommerce is consistently improving, and the June 2026 announcement to extend Amazon Freight services to the less-than-truckload market segment is an indication that management has sufficient comfort in the operational performance of the logistics network to further extend the platform to third parties.
We expect further increases in AWS's capital expenditure which will result in Amazon.com generating negative free cash flow. We believe the market remains overly focused on near-term free cash flow and continues to underappreciate the longer-term structural opportunity for the hyperscalers and the potential returns on their AI-related capital investment. Amazon CEO Andy Jassy's Letter to Shareholders in April 2026 is recommended reading, particularly his perspectives on AI and how Amazon is being positioned for what he considers to be a 'seminal shift'. Jassy shed some light on AWS's internal chip capabilities (particularly Graviton – CPU, and Trainium – GPU) which we believe remain under-appreciated, as is the nearer term ramp in AWS capacity. In our view, both the ecommerce flywheel and AWS remain underappreciated and undervalued."
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