ClearBridge Investments, a global equity manager, recently published first-quarter 2026 commentary for its “Small Cap Growth Strategy”. A copy of the letter can be downloaded here. The beginning of 2026 highlighted the significance of narratives, as the rapidly changing technological and geopolitical dynamics influenced market direction, leading the Russell 2000 Growth Index to decline by 2.8% for the quarter. Despite this, small-cap stocks continued to perform well. Market returns diversified in the first quarter, following a period of market concentration, favoring smaller-cap, value-oriented, and cyclical sectors. Concerns regarding the AI capital expenditure cycle led to increased sector dispersion. The ClearBridge Small Cap Growth Strategy outperformed its Russell 2000 Growth Index benchmark due to strong stock selection, particularly in industrials and consumer staples. The Strategy remains focused on identifying companies with sustainable, unique growth drivers, while reevaluating companies that may be affected by new technology. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.

In its first-quarter 2026 investor letter, ClearBridge Small Cap Growth Strategy mentioned stocks like Lattice Semiconductor Corporation (NASDAQ:LSCC). Lattice Semiconductor Corporation (NASDAQ:LSCC) is a provider of low-power field programmable gate arrays that can be custom-configured by the user through software. On April 8, 2026, Lattice Semiconductor Corporation (NASDAQ:LSCC) stock closed at $106.56 per share. One-month return of Lattice Semiconductor Corporation (NASDAQ:LSCC) was 23.18%, and its shares gained 152.32% over the past 52 weeks. Lattice Semiconductor Corporation (NASDAQ:LSCC) has a market capitalization of $14.59 billion.

ClearBridge Small Cap Growth Strategy stated the following regarding Lattice Semiconductor Corporation (NASDAQ:LSCC) in its Q1 2026 investor letter:

"While our holdings in the information technology (IT) sector were an overall performance headwind, performance among IT subsectors diverged meaningfully. Several semiconductor and hardware holdings, like Lattice Semiconductor Corporation (NASDAQ:LSCC), a provider of low-power programmable analog semiconductors, continued to perform quite well. The company benefited from improving sentiment around cyclical end markets as well as growing recognition of its role in emerging applications within AI servers and robotics."

Lattice Semiconductor Corporation (NASDAQ:LSCC) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 33 hedge fund portfolios held Lattice Semiconductor Corporation (NASDAQ:LSCC) at the end of the fourth quarter, up from 32 in the previous quarter. In Q4 2025, Lattice Semiconductor Corporation (NASDAQ:LSCC) delivered $145.8 million in revenue, up 9.3% sequentially and up 24.2% year-over-year. While we acknowledge the potential of Lattice Semiconductor Corporation (NASDAQ:LSCC) 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.

In another article, we covered Lattice Semiconductor Corporation (NASDAQ:LSCC) and shared a list of high growth semiconductor stocks to buy. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

Disclosure: None. This article is originally published at Insider Monkey.