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ClearBridge Investments, a global equity manager, recently published second-quarter 2026 commentary for its "SMID Cap Growth Strategy". A copy can be downloaded here. Small and mid-cap (SMID) growth equities experienced the strongest quarter in recent memory, with the Russell 2500 Growth Index rising 24.0%, driven by enthusiasm for AI infrastructure and higher-beta momentum stocks. The Strategy delivered double-digit returns in the quarter but trailed the soaring benchmark. Underperformance was driven by underexposure to top AI infrastructure stocks as well as weaknesses in healthcare and consumer discretionary sectors. The market leadership expanded beyond mega-cap technology, indicating potential opportunities from a broader cyclical recovery and AI adoption. In addition, you can check the Fund's top five holdings to determine its best picks for 2026.

In its Q2 2026 investor letter, ClearBridge SMID Cap Growth Strategy highlighted Wix.com Ltd. (NASDAQ:WIX). Wix.com Ltd. (NASDAQ:WIX) is an Israel-based cloud-based web development platform for registered users and creators. On July 9, 2026, Wix.com Ltd. (NASDAQ:WIX) closed at $49.24 per share, reflecting a market capitalization of 2.09 billion. Wix.com Ltd. (NASDAQ:WIX) posted a one-month return of 9.34%, while its shares lost 67.03% over the past 52 weeks.

ClearBridge SMID Cap Growth Strategy the following regarding Wix.com Ltd. (NASDAQ:WIX) in its Q2 2026 investor update:

"Despite reducing broad-based software exposure, select holdings weighed on results, including Wix.com Ltd. (NASDAQ:WIX), a website creation, e-commerce and business management software platform. Shares remain caught up in concerns around AI-driven disruption, the investment required to develop its own AI capabilities and decelerating growth in the core business."

Wix.com Ltd. (NASDAQ:WIX) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 53 hedge fund portfolios held Wix.com Ltd. (NASDAQ:WIX) at the end of the first quarter, up from 45 in the previous quarter. While we acknowledge the potential of Wix.com Ltd. (NASDAQ:WIX) 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 Wix.com Ltd. (NASDAQ:WIX) and shared the list of undervalued stocks to buy according to the Wall Street. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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