Soumya Eswaran
3 min read
Wasatch Global Investors, an asset management company, released its “Small Cap Growth Strategy” Q3 2026 investor letter. The letter can be downloaded here. The Wasatch Small Cap Growth strategy declined in Q3 2026 but outperformed the Russell 2000 Growth Index, which fell 9.39%. Strong company fundamentals and limited exposure to speculative AI-related stocks supported performance, while Paymentus, Repligen, and Global-e were top contributors. AI infrastructure holdings and Dutch Bros detracted despite solid fundamentals. The managers remain optimistic because portfolio companies are largely self-funded, earnings expectations are improving, no holdings saw reduced revenue estimates, and attractive relative valuations support continued outperformance. Also, check the Fund’s top five holdings to see its best picks for 2026.
In its Q3 2026 investor letter, Wasatch Small Cap Growth Strategy highlighted Paymentus Holdings, Inc. (NYSE:PAY). Paymentus Holdings, Inc. (NYSE:PAY) is a leading cloud-based bill payment technology and solutions company that contributed positively to quarterly performance. On October 27, 2026, Paymentus Holdings, Inc. (NYSE:PAY) closed at $31.87 per share with a market capitalization of $4.01 billion. Paymentus Holdings, Inc. (NYSE:PAY) is up 0.89% YTD trading within a 52-week trading range of $20.11 to $45.31.
Wasatch Small Cap Growth Strategy stated the following regarding Paymentus Holdings, Inc. (NYSE:PAY) in its Q3 2026 investor letter:
“Paymentus Holdings, Inc. (NYSE:PAY) was the top contributor to strategy performance in the third quarter. Paymentus operates a cloud-based platform that enables utilities, insurers and other essential-service billers to accept payments across multiple channels through a single integration. Shares continued to recover following a broad sell-off of software companies earlier in 2026, which reflected concerns that AI could disrupt software-and payments business models. We believe Paymentus is relatively insulated from this risk: Software development represents only a small portion of the cost to replicate Paymentus’s platform, while building the integrations, payment-channel coverage and operating history needed to match its capabilities would take a considerable amount of time. The company’s financial results also remain strong, with no evidence that AI has negatively affected the business.”
Paymentus Holdings, Inc. (NYSE:PAY) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Paymentus Holdings, Inc. (NYSE:PAY) at the end of the second quarter, which was 33 in the previous quarter. While we acknowledge the risk and potential of Paymentus Holdings, Inc. (NYSE:PAY) as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than PAY that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock.
