Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTSoumya EswaranThu, August 6, 2026 at 4:02 PM GMT+2 3 min readConestoga Capital Advisors, an asset management company, released its second-quarter 2026 investor letter. A copy of the letter can be downloaded here. The letter reports a positive market shift towards Small Caps, with the Russell 2000 Index achieving its best first half since 1991 and the Russell 2000 Growth Index up 25.7% in Q2, fueled by AI enthusiasm and semiconductor stocks. However, market leadership was uneven, with high-beta stocks outperforming while quality companies lagged, affecting Conestoga's strategies. Management is confident that speculative leadership won't endure as monetary policy tightens and expects high-quality growth businesses to regain prominence as market leadership broadens. The Conestoga SMid Cap Composite returned 7.04% (net) in the second quarter, underperforming the Russell 2500 Growth Index, which returned 24.02%. A combination of factor and sector-specific headwinds drove the underperformance, along with stock selection challenges, particularly within Technology and Industrials. In addition, please check the Strategy's top five holdings to know its best picks in 2026.In its Q2 2026 investor letter, Conestoga Capital Advisors highlighted Tyler Technologies, Inc. (NYSE:TYL). Tyler Technologies, Inc. (NYSE:TYL) is a leading integrated software and technology solutions provider for the public sector in the United States. On August 05, 2026, Tyler Technologies, Inc. (NYSE:TYL) closed at $306.58 per share. The one-month return of Tyler Technologies, Inc. (NYSE:TYL) was -1.42%, and its shares lost 48.92% over the past 52 weeks. Tyler Technologies, Inc. (NYSE:TYL) has a market capitalization of $12.56 billion.Conestoga Capital Advisors stated the following regarding Tyler Technologies, Inc. (NYSE:TYL) in its Q2 2026 investor letter:"Tyler Technologies, Inc. (NYSE:TYL), a provider of software solutions to local governments and state agencies, underperformed during the quarter despite delivering solid financial results that met management's guidance. Investor sentiment toward software companies has become increasingly influenced by concerns that artificial intelligence could disrupt long term growth prospects across the sector. We believe these concerns are overstated in TYL's case. The company's deep domain expertise, mission-critical software, highly recurring revenue base, and long-standing relationships with government customers create what we feel are significant competitive advantages that should help sustain its long term growth trajectory."Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info