Soumya Eswaran
2 min read
Diamond Hill Capital, a First Eagle Investment Management company, issued its Q3 2026 investor letter for its “Large Cap Strategy”. The letter can be downloaded here. The Strategy returned 3.18% (net of fees) in the quarter, outperforming the 2.61% return of the Russell 1000 Value Index. Key positive contributors included stock selection in information technology, an underweight in utilities, and an overweight in energy, while detractors were found in industrials, health care, and consumer staples. Looking ahead, the firm anticipates below-average returns due to high equity market valuations, although attractive bottom-up investment opportunities remain. Notably, software and legacy technology stocks outperformed in Q3 2026, despite recent index exclusions; some AI-related stocks that had boosted the index previously underperformed. Additionally, reviewing the Strategy’s top five holdings provides insight into its best positions for 2026.
In its Q3 2026 investor letter, Diamond Hill Large Cap Strategy highlighted Carrier Global Corporation (NYSE:CARR). Carrier Global Corporation (NYSE:CARR) is an intelligent climate and energy solutions provider that operates through Heating, Ventilating, and Air Conditioning (HVAC) and Refrigeration segments. On October 16, 2026, Carrier Global Corporation (NYSE:CARR) closed at $55.00, with a $45.34 billion market capitalization. Carrier Global Corporation (NYSE:CARR) is up 4.09% YTD, trading within a 52-week range of $50.24 to $76.76.
Diamond Hill Large Cap Strategy stated the following regarding Carrier Global Corporation (NYSE:CARR) in its Q3 2026 investor letter:
“Carrier Global Corporation (NYSE:CARR), a provider of residential and commercial HVAC, underperformed following mixed results after better-than expected revenue growth was offset by weaker margins amid tariffs and inflation. Shares were also pressured by concerns surrounding the sustainability of data center spending and higher interest rates delaying a residential HVAC recovery. Despite near-term headwinds, we believe Carrier is well positioned to gain market share and improve margins long term.”
Carrier Global Corporation (NYSE:CARR) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held Carrier Global Corporation (NYSE:CARR) at the end of the second quarter, which was 47 in the previous quarter. While we acknowledge the potential of Carrier Global Corporation (NYSE:CARR) 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.
