F5’s (FFIV) Commitment to Customer Excellence in Technology

In Hotchkis & Wiley's second-quarter 2026 investor letter, the Large Cap Fundamental Value Fund recognized F5, Inc. (NASDAQ:FFIV) as a notable individual performer. F5, Inc. provides multi-cloud application security and delivery solutions. As of August 31, 2026, the company's stock closed at $407.13 per share. Over the past month, F5's stock price declined by 3.41%, although it has increased by 29.82% over the past year.

The company boasts a market capitalization of $23.05 billion and has seen its shares trade within a 52-week range of $223.76 to $435.00. Hotchkis & Wiley noted that F5, Inc. has over 50% market share in traditional ADCs (application delivery controllers) and offers various multi-cloud networking and application security products.

The company's stock rose following strong quarterly results and updated revenue and EPS guidance. Despite the interest in AI investments, the fund expressed concerns about inflated valuations similar to those witnessed during the dot-com era. While AI has seen substantial capital investment, the potential for future earnings growth must justify these expenditures.

Hotchkis & Wiley suggested that select high-quality businesses with reasonable valuations might be better positioned to benefit from AI developments. The fund's cautious approach towards AI beneficiaries led to the fund underperforming the index in Q2 2026, returning 5.69% compared to the Russell 1000 Value Index's 13.87% return.

The underperformance can be attributed to the fund's lack of exposure to high-performing sectors like semiconductors, while the fund's healthcare stock selection provided a positive contribution.