ProPicks AI July: Mid‑Cap Movers +92.9% Return

ProPicks AI July Investor Letter – Rates Repricing and Leadership Rebalancing

The July 2026 investor letter from ProPicks AI outlines a market‑wide shift driven by the Federal Reserve’s higher‑for‑longer stance, which has repriced rates across the yield curve. Capital‑intensive giants such as Microsoft, Oracle and Meta each posted double‑digit declines in June, prompting investors to reallocate capital toward mid‑cap companies with strong balance sheets and expanding margins.

Mid‑Cap Movers Strategy Performance

• Total return since launch: +92.9%, outperforming the S&P Midcap 400 by +30.9 percentage points.
• June 2026 performance: +10.4% versus the benchmark’s +6.9%, delivering an outperformance of +6.9pp.
• Maximum drawdown: ‑12.3% (KD position held).
• The strategy’s win rate year‑to‑date stands at 73%.

Spotlight Exits – June Rebalance

1. Allegro MicroSystems (ALGM) – Held for 30 days, generated a +47.7% total return before exit. The model locked in gains as the stock approached a valuation stretch beyond its roughly $57 analyst consensus target. Fundamentals remain solid with expanding margins and a four‑fold increase in data‑center sales, but early cost pressures and elevated expectations narrowed the margin of safety.

2. Molina Healthcare (AMRX) – Held for 30 days, delivered a +24.8% total return before rotation. Q1 2026 beat expectations and the company secured a new Illinois Medicaid contract, yet extreme price swings and lagging performance eroded risk‑adjusted returns. A guidance cut to roughly $5 per share pushed the price‑to‑earnings multiple to an extreme 63×, prompting reallocation to higher‑conviction alternatives.

New July Picks – Leadership Rebalancing

• Diodes Inc (DIOD) – Information Technology sector, YTD +116.25% (reported as +122% in narrative). The stock boasts a PEG ratio of 0.256 after six consecutive quarters of double‑digit revenue growth and a 22% YoY Q1 revenue jump. Automotive demand is up 32% and industrial demand 31%, providing pricing power and product shortages. Management targets $2 billion revenue and $4+ EPS by 2028.
• Oscar Health (OSCR) – Classified under Financials (health‑insurance), YTD +119.07%. Q1 2026 earnings beat expectations at $2.07 per share versus the $1.06 consensus. Membership grew 56% YoY to 3.2 million, and operating margins expanded beyond 15.2%. A landmark court ruling removed ACA enrollment restrictions, and Barclays upgraded the price target to $35. Full‑year revenue is projected near $19 billion.

Broader AI‑Driven Strategy Suite

ProPicks AI manages 88 distinct strategies across sectors and geographies. Notable cumulative performances include:

• Tech Titans: +247.7% since launch, +170.9pp versus the S&P 500.
• Dominate the Dow: +50.0% since launch, underperforming the DJIA by ‑7.6pp.
• Top Value Stocks: +80.9% since launch, +18.2pp versus the S&P 500 Pure Value.
• Energy Elite: +34.5% since launch, +11.3pp versus the S&P 500 Energy.
• Financial Fortresses: ‑15.2% since launch, ‑20.3pp versus the S&P 500 Financials.
• Additional strategies such as Healthcare Heroes, Small‑Cap Sprinters, Quality Compounders, Italian Market Elite, and HK Tech Titans also show material outperformance relative to their respective benchmarks.

Market Context – Rates Repricing

The letter attributes the June rotation to a higher‑for‑longer Federal Reserve policy, which has lifted yields across the curve and increased the cost of capital. This environment favored mid‑cap firms with disciplined balance sheets, especially those operating in AI infrastructure and healthcare, while prompting sell‑offs in large‑cap, capital‑intensive technology names.

Access and Subscription

Readers can access the full list of AI‑picked stocks for July, view live rebalances, and examine rationales for all positions across the 88 strategies via the ProPicks AI platform. Subscription provides monthly updates and the ability to track performance in real time.