Underweight in Vertiv Holdings Co (VRT) Hurt Fidelity Growth Strategies Fund’s Performance in Q1

Soumya Eswaran

Tue, May 19, 2026 at 10:07 AM EDT 3 min read

Fidelity Investments, an investment management company, recently released its first-quarter 2026 investor letter for “Fidelity Growth Strategies Fund”. A copy of the letter is available to download here. The Fidelity Growth Strategy is a diversified equity strategy aimed at domestic midcap growth stocks. The approach focuses on identifying quality companies that deliver steady above-average growth and can outperform over time. The Fund (Retail Class shares) returned -3.21% in the quarter, outperforming the benchmark Russell Midcap® Growth Index’s -6.35% return. The outperformance was primarily due to industry and stock selection, particularly in the industrials sector. The US stock market started 2026 positively, but declined in late February amid concerns over the viability of artificial intelligence investments and Middle Eastern conflicts. Investors shifted to defensive strategies, favoring stable, large-cap firms, leading to value equities outperforming growth. The fund continues to favor companies with strong competitive moats and growth potential. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Fidelity Growth Strategies Fund highlighted Vertiv Holdings Co (NYSE:VRT). Vertiv Holdings Co (NYSE:VRT) is a critical infrastructure solutions provider for data centers, communication networks, and commercial and industrial environments. On May 18, 2026, Vertiv Holdings Co (NYSE:VRT) closed at $339.73 per share. One-month return of Vertiv Holdings Co (NYSE:VRT) was 8.73%, and its shares gained 219.33% over the past 52 weeks. Vertiv Holdings Co (NYSE:VRT) has a market capitalization of $130.49 billion.

Fidelity Growth Strategies Fund stated the following regarding Vertiv Holdings Co (NYSE:VRT) in its Q1 2026 investor letter:

"Conversely, an underweight in Vertiv Holdings Co (NYSE:VRT) (+55%), which provides power management and cooling solutions to data centers and other high performance facilities, was the biggest detractor from relative performance in Q1. The stock jumped in early February in anticipation of, and then following, the firm's quarterly financial update. Revenue and operating margin both meaningfully expanded, and organic orders surged roughly 250%. While Vertiv closed the quarter as a top-10 holding, we modestly reduced the stake, and it was the portfolio's largest underweight at quarter end."

Vertiv Holdings Co (NYSE:VRT) ranks 38 on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 112 hedge fund portfolios held Vertiv Holdings Co (NYSE:VRT) at the end of the fourth quarter, up from 102 in the previous quarter. While we acknowledge the potential of Vertiv Holdings Co (NYSE:VRT) 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.