L1 Capital International Sees Intuit’s (INTU) Decline as Market’s Overreaction

L1 Capital International Sees Intuit’s (INTU) Decline as Market’s Overreaction Soumya Eswaran Mon, July 20, 2026 at 3:38 PM GMT+2 4 min read INTU L1 Capital , an investment management firm, released its "L1 Capital International Fund" (unhedged) second-quarter 2026 investor letter. A copy of the letter can be downloaded here . The letter discusses the current investment environment as a 'two-speed' but resilient global economy, accompanied by an uncertain future.

The letter explores the potential of an AI bubble, distinguishing between strong fundamentals and speculative momentum. Additionally, the market displays a 'narrow' character, marked by high exuberance and pronounced over-pessimism. Against this backdrop, the Fund returned +2.

6% (net of fees) during the June 2026 quarter, compared to the benchmark return of +12. 5% (all in A$). The underperformance was driven more by which investments were not held in the Fund.

The Fund remains focused on quality, valuation and the avoidance of permanent capital loss, and believes the portfolio is positioned to deliver attractive risk-adjusted returns for patient investors. In addition, you can check the Fund's top five holdings to know its best picks in 2026. In its Q2 2026 investor letter, L1 Capital International Fund highlighted Intuit Inc.

(NASDAQ: INTU ). Intuit Inc. (NASDAQ:INTU) is a financial software company offering products and services for financial management, payments, capital, compliance, and marketing.

On July 17, 2026, Intuit Inc. (NASDAQ:INTU) closed at $291. 09 per share.

One-month return of Intuit Inc. (NASDAQ:INTU) was 12. 93%, and its shares lost 61.

88% over the past 52 weeks. Intuit Inc. (NASDAQ:INTU) has a market capitalization of $79.

62 billion. L1 Capital International Fund stated the following regarding Intuit Inc. (NASDAQ:INTU) in its Q2 2026 investor update: "Intuit Inc.

's (NASDAQ:INTU) Q3 2026 quarterly results were moderately below our – and the market's – expectations. The share price fell nearly 40% during the June 2026 quarter. While we consider the market's response excessive, it was not without reason.

Intuit operates a number of software businesses. QuickBooks (accounting, payroll and payments) continues to perform solidly although growth rates are expected to slow. Credit Karma (personal finance) has performed exceptionally well, while Mailchimp (marketing) has struggled since acquisition although this is not new information.

The core disappointment was the TurboTax business. TurboTax is a tale of two cities. Intuit has been investing in AI for many years.

TurboTax has developed a hybrid offering between AI driven software and a human tax expert called TurboTax Live which is rapidly disrupting the 'do it for me' tax filing industry. This part of TurboTax grew at a mid-30s growth rate and is now over 50% of total TurboTax revenue. However, the 'do it yourself' TurboTax product lost meaningful share amongst price sensitive, low-income filers, causing a modest downgrade to expected total TurboTax divisional growth from around 8% to around 7% for FY2026.

On its surface the slightly lower revenue expectations look de minimis, but we had expected Intuit to exceed its prior guidance. The key investment question is whether recent market share loss reflects temporary execution issues or a structural change in competitive dynamics resulting from AI. Intuit is now trading well below our assessment of fair value.

Execution will be critical and evidence of improvement will take time. Given the heightened uncertainty, the now smaller position reflects what we consider to be an appropriate balance between risk and potential return. " Story Continues TD Cowen Expects Strong Q3 Performance from Intuit (INTU) Intuit Inc.

(NASDAQ:INTU) is not on our list of  40 Most Popular Stocks Among Hedge Funds Heading Into 2026 . According to our database, 92 hedge fund portfolios held Intuit Inc. (NASDAQ:INTU) at the end of the first quarter, compared to 91 in the previous quarter.

In the third quarter of fiscal 2026, Intuit Inc. (NASDAQ:INTU) reported  revenue of $8. 6 billion, reflecting a 10% year-over-year growth.

While we acknowledge the potential of Intuit Inc. (NASDAQ:INTU) 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 .

In  another article , we covered Intuit Inc. (NASDAQ:INTU) and shared Magellan Global Opportunities Fund's insights on the company. In addition, please check out our hedge fund investor letters Q2 2026  page for more investor letters from hedge funds and other leading investors.

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