Bloom Energy Corp. (BE) Short Position Weighs on Performance Amid Small-Cap AI Rally
Wasatch Global Investors published its Q2 2026 Long/Short Alpha Fund investor letter, discussing performance and holdings. Small- and mid-cap growth stocks, particularly AI-related companies, had strong gains in Q2. The Russell 2500 Index increased by 20.26%, while the Wasatch Long/Short Alpha Fund rose 8.29%. However, the fund faced challenges due to lower-quality companies outperforming, affecting its long positions.
Despite trailing the benchmark and incurring losses in short positions, the fund remains confident in its long portfolio's fundamentals. Wasatch Long/Short Alpha Fund highlighted Bloom Energy Corporation (NYSE:BE) as one of the fund's holdings. Bloom Energy designs and manufactures solid-oxide fuel cell systems for clean, reliable power generation.
The company's stock price has risen 225.53% over the past year, with a market capitalization of $76.39 billion. The fund attributed Bloom Energy's underperformance to AI-related exuberance in the small cap market. The fund also noted that Bloom Energy is not among the top 40 most popular stocks among hedge funds. While acknowledging the potential of Bloom Energy, the fund believes other AI stocks offer greater upside potential with less downside risk.
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