Market Re-Rating Aligns Microsoft Corporation’s (MSFT) Valuation with Core AI Fundamentals

L1 Capital, an investment management firm, released its "L1 Capital International Fund" (unhedged) third-quarter 2026 investor letter. A copy of the letter can be downloaded here. This Quarterly Report covers the unusually complex investment environment, AI's opportunities and challenges, portfolio strategy, September 2026 performance, and recent adjustments. The Fund returned +3.5% net of fees in the September 2026 quarter, outperforming its benchmark's 1.5% gain, despite a stronger Australian dollar. Energy, Information Technology and Communication Services performed well, while Utilities, Industrials and Real Estate lagged. The portfolio held 22 investments, with the ten largest representing about 63% of assets.