Why Littelfuse (LFUS) Is Emerging as an AI Infrastructure Winner

Why Littelfuse (LFUS) Is Emerging as an AI Infrastructure Winner

Tue, September 1, 2026 at 8:12 PM GMT+3 3 min read

• LFUS -0.94%

Investment management company First Pacific Advisors recently released its "FPA Queens Road Small Cap Value Fund" second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The Fund returned 27.02% in the first half of 2026, outperforming the Russell 2000 Value Index's 22.99% gain and the S&P 600 Index's 23.90% return. Small-cap earnings growth also began accelerating relative to large caps, while the small-cap technology sector surged nearly 100% in 26H1. The fund's technology holdings gained 72.39%, contributing 14.87 percentage points, compared with a 95.27% return and 7.10-point contribution from the benchmark's technology sector. Excluding IT and cash, the Fund contributed 12.73% versus 15.89% for the Russell 2000 Value Index; on a fully invested basis, the figures were 16.62% and 17.59%, respectively. The portfolio continued to trim appreciated technology holdings amid the AI-driven rally, while maintaining a bottom-up approach and avoiding beaten-down SaaS stocks due to the widening range of AI-related outcomes. The fund also eliminated about $62 million in capital gains during Q2 and approximately $140 million year-to-date through July, while ending the quarter with 10.2% in cash. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its second-quarter 2026 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks like Littelfuse (NASDAQ:LFUS). Littelfuse (NASDAQ:LFUS) develops circuit protection, power control, and sensing technologies serving automotive, industrial, and electronics markets. The one-month return of Littelfuse (NASDAQ:LFUS) was -11.64% while its shares traded between $233.36 and $500.57 over the last 52 weeks. On August 31, 2026, Littelfuse (NASDAQ:LFUS) stock closed at approximately $405.42 per share, with a market capitalization of about $10.47 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding Littelfuse (NASDAQ:LFUS) in its Q2 2026 investor letter:

"Littelfuse (NASDAQ:LFUS) manufactures niche electrical components including fuses, sensors, passives and semiconductors that are sold into a broad array of end markets. Mid-single digit organic growth is supplemented by tuck in acquisitions and the company has high teens operating margins and strong returns on capital. We significantly added to our position in April 2025 when the stock declined on tariff fears. Since then, LFUS's share price has more than doubled as the company demonstrated it could navigate tariffs, sales and orders accelerated out of their post-Covid trough, and the company recorded incremental sales into data centers" (Click Here To Read The Letter In Detail).

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Littelfuse (NASDAQ:LFUS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 64 hedge fund portfolios held Littelfuse (NASDAQ:LFUS) at the end of the first quarter, which was 43 in the previous quarter. While we acknowledge the risk and potential of Littelfuse (NASDAQ:LFUS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

In another article, we covered Littelfuse (NASDAQ:LFUS) and shared Vulcan Value Partners' views on the company. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.