Here’s Why Dolby Laboratories (DLB) Traded Down in Q2

Here’s Why Dolby Laboratories (DLB) Traded Down in Q2

Thu, September 17, 2026 at 4:28 PM GMT+3 3 min read

Cambiar SMID Fund, managed by Cambiar Investors, published its Q2 2026 investor letter. The letter can be downloaded here. U.S. equity markets rebounded strongly in the second quarter, with the S&P 500 gaining 15.2% and the Russell 2000 rising 21.5%. Growth outperformed value during the quarter, although value remained ahead year-to-date. Small- and mid-cap stocks also rallied, as the Russell 2500 Value Index returned 18.5%. Despite the Cambiar SMID Fund's 14.39% return (both the investor and the institutional class) —its best since Q4 2022—it lagged behind the index. Technology and Industrials were notable contributors during the quarter. Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026.

In its second-quarter 2026 investor letter, Cambiar SMID Fund highlighted Dolby Laboratories, Inc. (NYSE:DLB). Dolby Laboratories, Inc. is a US-based technology company that designs and manufactures audio, imaging, accessibility, and other hardware and software solutions for television, broadcast, and live entertainment industries. On September 16, 2026, Dolby Laboratories, Inc. (NYSE:DLB) closed at $58.74 per share. Over the past month, Dolby Laboratories, Inc. (NYSE:DLB) declined 8.49%, and its shares lost 18.53% over the past 52 weeks. Dolby Laboratories, Inc. (NYSE:DLB) has a market capitalization of $5.5 billion, and its stock has traded within a 52-week range of $48.26 and $73.01.

Cambiar SMID Fund stated the following regarding Dolby Laboratories, Inc. (NYSE:DLB) in its Q2 2026 investor letter:

"The portfolio had exposure to the rallying semiconductor industry via our holdings in Lattice Semi and On Semiconductor, which helped to offset a pullback in Dolby Laboratories, Inc. (NYSE:DLB). The weakness in Dolby is a function of the company's exposure to consumer electronics end markets – which has incurred a drop in sales due to higher memory prices. Although Dolby is insulated by their unique IP licensing business model (where they benefit from higher product prices), total industry growth has been disappointing, and this has filtered into a below expectations growth forecast. We continue to maintain a position but are closely monitoring the situation."

Dolby Laboratories, Inc. (NYSE:DLB) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Dolby Laboratories, Inc. (NYSE:DLB) at the end of the second quarter the same as in the previous quarter. While we acknowledge the potential of Dolby Laboratories, Inc. (NYSE:DLB) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. 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 the best short-term AI stock.

In another article, we discussed Dolby Laboratories, Inc. (NYSE:DLB) and shared Prosper Stars & Stripes' views on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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This article is originally published at Insider Monkey.