Qualcomm Positioned to Harness AI Opportunity

Sound Shore's Q2 2026 investor letter highlights Qualcomm as a key driver of the fund's performance, alongside Marvell Technology. The fund's value discipline steers it away from the most expensive parts of the market, yet it sees Qualcomm as a business marrying secular technology tailwinds with a compelling valuation. The letter notes Qualcomm is trading at an attractive 10 times earnings power once its new business kicks in, a metric the fund uses to assess long-term earning power.

The AI wave that boosted the portfolio in Q2 aligns with the broader market rebound driven by AI and semiconductor sectors. Sound Shore's emphasis on durable management strategies and long-term assessments suggests it views Qualcomm as a company with strategic flexibility to capture the immense AI opportunity ahead, particularly as its developer tools accelerate edge AI functionality in new markets.

The fund's performance, while trailing the Russell 1000 Value and S&P 500 in Q2, shows stronger three-year annualized gains versus the Russell Value, though still behind the S&P 500. This context underscores Sound Shore's approach of balancing growth potential with valuation discipline, a stance that positions Qualcomm as a notable holding in its portfolio.