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Baron Small Cap Fund points to Everforth after AI tradeoffs hit IT stocks
Everforth shares closed at $31.67 on Aug. 17, 2026, after the company weighed on the fund by 0.71% in the quarter.
Baron Capital’s Baron Small Cap Fund reported that it gained 12.6% in Q2 2026, trailing the Russell 2000 Growth Index’s 25.7% return, as U.S. equities rebounded following the March selloff tied to the U.S.-Iran conflict. The fund said market gains were driven largely by AI infrastructure, semiconductors, and other technology exposure, while small caps also outperformed large caps, though results skewed toward higher beta and momentum stocks.
In its Q2 2026 investor letter, the fund highlighted Everforth, Inc. (NYSE: EFOR) as an IT solutions provider to commercial and government customers. Everforth detracted 0.71% from the fund’s performance during the quarter, with the stock positioned against a backdrop where software and services companies remained pressured by concerns that AI could disrupt their businesses.
Baron Capital said Everforth, which was formerly known as ASGN Incorporated, saw shares fall after disappointing first-quarter results and with second-quarter guidance below expectations. On Aug. 17, 2026, Everforth closed at $31.67 per share, the company’s market capitalization was described as $1.3 billion, and the investor letter cited a one-month return of 72.6% and a 52-week loss of 40.0%.
Looking ahead, the fund said broader market participation, attractive small-cap valuations, improving industrial growth, and stronger earnings could support future returns, even as uncertainty remains around oil prices, inflation, and interest rates. The letter also referenced that performance concentration in historically less-exposed areas, along with pressure on software and services, continued to shape the quarter’s results.
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