Concerns Over Defense Spending Weighed on CACI International Inc (CACI)

Meridian Funds, managed by ArrowMark Partners, released its second-quarter 2026 investor letter for "Meridian Contrarian Fund". The letter can be downloaded here . U.S. equity markets experienced a strong recovery in Q2 2026, driven by improved sentiment following de-escalation of geopolitical tensions and retreating energy prices. S&P 500 companies reported first-quarter profit growth above expectations, bolstering investor confidence. Significant gains in semiconductor and memory chip stocks were fueled by an accelerated AI investment cycle. The Russell 2500 Index saw a 20.26% return, notably propelled by the Information Technology sector, which accounted for nearly 50% of the index's gains. The Meridian Contrarian Fund returned 17.75%, underperforming both the Russell 2500 Index and the Russell 2500 Value Index. Looking ahead, the investment strategy remains focused on finding value in overlooked companies. Also, check the fund's top five holdings to see its best picks in 2026.

In its second-quarter 2026 investor letter, Meridian Contrarian Fund highlighted CACI International Inc (NYSE: CACI ). CACI International Inc (NYSE:CACI) provides expertise and technology to enterprise and mission customers in support of national security in the intelligence, defense, and federal civilian sectors. On September 03, 2026, CACI International Inc (NYSE:CACI) closed at $630.00 per share. Over the past month, CACI International Inc (NYSE:CACI) declined 2.24%, but its shares are up 32.79% over the past year. CACI International Inc (NYSE:CACI) has a market capitalization of $13.92 billion.

Meridian Contrarian Fund stated the following regarding CACI International Inc (NYSE:CACI) in its Q2 2026 investor letter:

"CACI International Inc (NYSE:CACI) is an IT consultant and provider of mission-critical technology to the U.S. Government and its agencies, which account for nearly 95% of its sales. CACI plays a vital role in modernizing IT infrastructure, systems and other essential defense needs, including capabilities in cyber, space, and counter drone operations, for the U.S. We have held CACI for over 10 years as the company has consistently grown into a larger supplier to the U.S as its capabilities are a growing priority. Concerns on the U.S. Government's ability to fund defense spending drove a reduction in the share price. We reduced our position in the quarter and still view CACI's capabilities as differentiated and a priority spending area for the U.S and our allies."

CACI International Inc (NYSE:CACI) is not on our list of the 40 Most Popular Stocks Among Hedge Funds . According to our database, 35 hedge fund portfolios held CACI International Inc (NYSE:CACI) at the end of the second quarter, down from 44 in the previous quarter. While we acknowledge the potential of CACI International Inc (NYSE:CACI) 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 .