ClearBridge Shifts Amid Growth Stock Turmoil

ClearBridge Investments reported that its Large Cap Growth Strategy outperformed its benchmark in the first quarter of 2026 despite a difficult backdrop for growth equities. Following the outbreak of the Middle East conflict, growth stocks saw significant declines, with the S&P 500 Index (SPX) down 4.3%, the Russell 1000 Growth Index down 9.8%, and the Russell 1000 Value Index down 2.1% for the quarter.

ClearBridge attributed its relative performance to a shift away from the technology and momentum stocks that had led markets in 2025. The strategy benefited from a positive reversal in communication services and support from cyclical growth areas such as industrials, materials, and parts of the IT sector.

In response to the volatile environment, the Large Cap Growth Strategy was repositioned to increase exposure to semiconductors and biopharmaceuticals. ClearBridge also exited positions where corporate turnarounds were taking longer than expected, describing these changes as part of its discipline in managing risk and capital allocation.

Alnylam Pharmaceuticals was among the biopharmaceutical holdings highlighted. The company discovers and commercializes therapeutics based on ribonucleic acid interference. As of April 8, 2026, Alnylam shares closed at $327.25, giving it a market capitalization of $43.66 billion, after gaining 44.62% over the prior 52 weeks.

ClearBridge disclosed that it exited PayPal Holdings (PYPL) and Equinix during the first quarter of 2026. The manager said that for turnaround investments like PayPal, it regularly weighs potential improvement against downside risks and the opportunity cost of prolonged recovery timelines.

Although ClearBridge noted some signs of improvement in PayPal’s business, it said the turnaround had proved more challenging than expected, prompting the sale. Equinix was sold while it remains in the midst of a large capital expenditure cycle, with ClearBridge expecting AI-related tailwinds from increased customer spending on inference to take time to appear in results.

Equinix operates interconnected data centers that provide network and cloud platforms for enterprise customers. On April 8, 2026, Equinix closed at $1,017.66 per share, with a market capitalization of $100.37 billion, a one-month return of 4.75%, and a 32.04% gain over the past 52 weeks.

Separate analyst commentary shows PayPal trading at $46.10 with an average price target of $52.74, implying roughly 14% upside. The stock trades at a trailing price-to-earnings multiple of 8x, with free cash flow in 2025 declining 17.78% and its highest-margin branded checkout product showing deteriorating performance.

PayPal operates a large digital payments platform, including branded checkout, Venmo, Hyperwallet and merchant processing. The company reported 439 million active accounts and $475.13 billion in total payment volume last quarter. Management guided fiscal 2026 non-GAAP EPS to a range from a low-single-digit decline to slightly positive growth versus 2025’s $5.31.

Analyst data cited show 44 ratings on PayPal, comprising 10 Buys, 30 Holds and 4 Sells. The Hold-heavy stance reflects caution about timing, with focus on whether new CEO Enrique Lores can stabilize branded checkout and whether AI partnerships with Google, OpenAI and Perplexity can improve engagement.

ClearBridge also highlighted Fair Isaac Corporation as a holding affected by the broader selloff in software stocks. It noted that the Middle East conflict accelerated weakness that had started in software, impacting names such as Intuit (INTU), Fair Isaac, Oracle (ORCL) and Salesforce (CRM) amid fears they could be disintermediated by AI.

Fair Isaac, known for its FICO score, was further pressured by concerns about growing competition. ClearBridge characterized these concerns as overblown and said the company continues to deliver considerable value to customers. Fair Isaac reported first-quarter fiscal 2026 revenue of $512 million, up 16% year over year.

On April 8, 2026, Fair Isaac shares closed at $1,092.04, with a market capitalization of $25.91 billion. The stock’s one-month return was -0.14%, and it had declined 40.97% over the preceding 52 weeks.