TD SYNNEX (SNX): How Its Data Center Business Is Driving Growth

First Pacific Advisors' Q2 2026 investor letter reveals TD SYNNEX (NYSE:SNX) as one of the fund's top five holdings for 2026. The data center business of TD SYNNEX, known as Hyve, is a key driver of growth, with billings growing at nearly 100% annualized rate and projected to contribute around $700m in operating earnings for the year.

This performance exceeded investors' expectations, leading to a successful stock performance since the earnings release. FPA Queens Road Small Cap Value Fund acknowledges TD SYNNEX's strong management, scale advantages, and growing profits aligned with IT spending growth. Despite trimming their position, TD SYNNEX continues to be a top holding for the fund, trading at approximately 13x forward earnings.

However, the fund's conviction lies in the belief that some AI stocks hold greater promise for higher returns within a shorter time frame.