Q1 Investor Letters Show Iran Shock and AI Uncertainty Reshaped Early‑2026 Markets

Fund commentaries this week show managers shifting into chip and data‑center suppliers while adding to beaten-down stocks they judge unfairly punished.

Overview

This week’s June investor letters from Pzena, Burke and other managers say the March Iran conflict and a jump in oil prices, combined with ongoing uncertainty over AI’s timing and business impact, drove sharp sector divergence in Q1 2026.
Pzena reported a -4.7% net return for its Focused Value Strategy versus +2.1% for the Russell 1000 Value Index and said health care, financials and technology were the biggest detractors.
Pzena said it added to or started positions in companies it called oversold because of misplaced AI fears, naming Humana, CDW, Skyworks and Cognizant as examples and saying some losses stemmed from short‑term policy and timing issues.
Burke reported a -10.6% Q1 return and highlighted Micron and ASML as rare winners that rose on surging demand for compute tied to large AI capex commitments, while enterprise software names such as ServiceNow, Snowflake and CrowdStrike saw decade‑low valuations despite solid earnings.
Managers said they are rotating into semiconductors and data‑center infrastructure, tightening risk controls and watching policy and macro signals that could hurt consumer credit or company‑specific earnings, with CHIPS subsidies and hyperscaler capex cited as the main structural supports for chip and equipment demand.