NZS Capital, LLC, an investment management company, released its "NZS Growth Equity Strategy" second-quarter 2026 investor letter. A copy of the letter can be downloaded here. Equity markets delivered a strong performance in the second quarter of 2026, driven by demand for AI infrastructure, geopolitical stabilization, and positive earnings reports. The portfolio achieved a gross return of +24.96% and a net return of +24.76%, significantly outperforming the +14.79% return for the Morningstar Global Target Market Exposure Index. Overweight in Semiconductors, stock selection in areas like Software and Industrials, and zero exposure to Energy contributed to the Strategy's outperformance in the quarter. In addition, please check the Strategy's top five holdings to know its best picks in 2026.
In its Q2 2026 investor letter, NZS Growth Equity Strategy highlighted stocks like Axogen, Inc. (NASDAQ:AXGN). Axogen, Inc. (NASDAQ:AXGN) is a biotechnology and medical services company that develops and commercializes technologies for peripheral nerve regeneration and repair. On July 20, 2026, Axogen, Inc. (NASDAQ:AXGN) closed at $39.48 per share. One-month return of Axogen, Inc. (NASDAQ:AXGN) was -11.66%, and its shares gained 214.83% over the past 52 weeks. Axogen, Inc. (NASDAQ:AXGN) has a market capitalization of $2.1 billion.
NZS Growth Equity Strategy stated the following regarding Axogen, Inc. (NASDAQ:AXGN) in its Q2 2026 investor update:
"New additions to the portfolio were optionality positions in Axogen, Inc. (NASDAQ:AXGN). Axogen provides nerve grafts used for peripheral nerve repair. Following BLA approval of their Avance nerve allograft and related positive momentum in insurance coverage, we think Axogen is highly asymmetric to a future where nerve repair becomes standard-of-care, including for patients undergoing a mastectomy or prostatectomy (PSA to look into Axogen's tech if you or someone you know could benefit). WuXi XDC is a China-based Contract Research, Development, and Manufacturing Organization (CRDMO) focused on bioconjugates, an exciting research area that is rapidly developing new therapies. The aforementioned U.S. BIOSECURE Act provided us an attractive entry point into this rapidly growing business and will also keep a lid on position size given the range of outcomes. In short, we think a modestly higher dose of this "quality growth" sector is good for our portfolio's health, and we've been incrementally expressing this view."
Axogen, Inc. (NASDAQ:AXGN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 36 hedge fund portfolios held Axogen, Inc. (NASDAQ:AXGN) at the end of the first quarter, up from 26 in the previous quarter. While we acknowledge the potential of Axogen, Inc. (NASDAQ:AXGN) 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.
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