Compressed Valuation Multiple Hurt Gartner (IT)
Baron Small Cap Fund reported a 7.90% decline in Q1 2026, underperforming the Russell 2000 Growth Index. The fund's investor letter highlighted Gartner, Inc. (NYSE:IT) as a detractor from performance due to valuation multiple compression amid rising AI concerns for IT services companies. Despite this, Baron Small Cap Fund maintains its position in Gartner, citing its large addressable market, competitive advantages, robust free cash flow, and aggressive share repurchases, while acknowledging the potential of other AI stocks for higher returns.
https://www.insidermonkey.com/blog/compressed-valuation-multiple-hurt-gartner-it-1753879/