Impax Asset Management, a London-based firm specializing in sustainable investing, has published its Q2 2026 investor letter for the Impax US Sustainable Economy Fund (downloadable here). Impax is among a number of institutional managers that publish quarterly letters detailing portfolio positioning, which have become a closely followed source of insight into how professional investors are interpreting market trends.

The fund's US Sustainable Economy portfolio outperformed the Russell 1000 during Q2 2026. Institutional Class returned 17.96%, Investor Class 17.95%, and Class A 17.92%, compared with the index's 15.14%. Impax attributed the outperformance to sector allocation and stock selection, noting that its sustainability tools — including the Impax Sustainability Lens and the Corporate Resilience framework — contributed positively.

According to the letter, equity markets rallied during the quarter, with both the S&P 500 and the Nasdaq reaching new highs before retreating. A key trend was investor rotation into AI and technology stocks, supported by mega-cap earnings and data center investments estimated at US$750 billion to US$1 trillion. Looking at the second half of 2026, Impax expects markets may remain volatile amid ongoing debates over the pace of AI adoption and economic momentum. Nevertheless, the firm views growth tied to energy security and efficiency as compelling, with demand for power, grid, and resource-efficient solutions supporting companies positioned in these areas.

The Impax team said it focuses on businesses with strong growth, sound management, and attractive valuations, adjusting holdings as needed in order to build well-diversified, differentiated portfolios. The fund's top five holdings are detailed separately as its best picks for 2026.

AMD Highlighted as a Key Contributor

In its second-quarter 2026 investor letter, the Impax US Sustainable Economy Fund highlighted Advanced Micro Devices, Inc. (NASDAQ: AMD) as a key contributor to performance. AMD is a leading semiconductor company that designs and manufactures AI accelerators, microprocessors, and graphics processing units. The company competes in the AI accelerator market against rivals such as NVIDIA, and Impax's cited evidence of market share gains in this segment points to AMD's expanding role in the data center buildout underpinning the AI investment cycle.

On September 4, 2026, AMD closed at $477.57 per share, reflecting a market capitalization of $779.62 billion. The stock returned 1.71% over the past month, while shares are up 215.42% over the past year.

Impax US Sustainable Economy Fund stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2026 investor letter:

"Advanced Micro Devices, Inc. (NASDAQ:AMD) (Semiconductors, Information Technology) is held for its attractive sustainability opportunity set, particularly in Digital Infrastructure, and for its high Corporate Resilience score across environmental and governance dimensions. The stock rose substantially in the quarter, driven by strong adoption of its AI-optimized GPU (graphics processing unit) and data center processor products. A series of major partnership announcements with cloud computing providers and continued evidence of market share gains in AI accelerator hardware reinforced investor confidence in the company's multi-year earnings growth trajectory."

Hedge Fund Positioning

Advanced Micro Devices, Inc. (NASDAQ: AMD) ranks 20th on the list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to the database, 164 hedge fund portfolios held AMD at the end of the second quarter, up from 134 in the previous quarter.

While acknowledging AMD's potential as an investment, Insider Monkey has also shared its view that certain AI stocks may offer greater upside potential with less downside risk, including an undervalued AI stock it believes stands to benefit from Trump-era tariffs and the onshoring trend.

In another article, Insider Monkey discussed Advanced Micro Devices, Inc. (NASDAQ:AMD) and shared Artisan Global Opportunities Strategy's views on the company. Additional coverage is available on the hedge fund investor letters Q2 2026 page.

This article was originally published at Insider Monkey.