CoStar (CSGP): Residential Strategy Unchanged Despite Persistent Market Skepticism

Weitz Investment Management , an investment management firm, released its second-quarter Q2 2026 investor letter for the "Multi Cap Equity Fund". The letter can be downloaded here . The Multi Cap Equity Fund's Institutional Class returned 7.90% in Q2, underperforming the Bloomberg U.S. 3000 Index's 15.71% gain. Markets rose in the quarter on hopes of de-escalating Middle East tensions and easing oil flow. Investor focus shifted back to artificial intelligence, despite component shortages like processing chips affecting profits and valuations. Valuation-sensitive investors are selective within the AI sector, in contrast to valuation-agnostic indexes that adopt a more relaxed strategy. Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026.

In its second-quarter 2026 investor letter, Weitz Multi Cap Equity Fund highlighted CoStar Group, Inc. (NASDAQ: CSGP ). CoStar Group, Inc. (NASDAQ:CSGP), an information, analytics, and online marketplace services provider for commercial and residential property markets. On September 15, 2026, CoStar Group, Inc. (NASDAQ:CSGP) closed at $31.56 per share, reflecting a market capitalization of $12.79 billion. CoStar Group, Inc. (NASDAQ:CSGP) posted a one-month return of -6.43%, while its shares lost 64.08% over the past 52 weeks.

Weitz Multi Cap Equity Fund stated the following regarding CoStar Group, Inc. (NASDAQ:CSGP) in its Q2 2026 investor letter:

"CoStar Group, Inc.'s (NASDAQ:CSGP) management prevailed in its struggle with an activist investor and remains undeterred in its residential real estate strategy. Investors are clearly skeptical of management's plan, but at current prices, we believe the punishment has gone too far."

CoStar Group, Inc. (NASDAQ:CSGP) is not on our list of the 40 Most Popular Stocks Among Hedge Funds . According to our database, 58 hedge fund portfolios held CoStar Group, Inc. (NASDAQ:CSGP) at the end of the second quarter, down from 62 in the previous quarter. While we acknowledge the potential of CoStar Group, Inc. (NASDAQ:CSGP) 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 discussed CoStar Group, Inc. (NASDAQ:CSGP) and shared Polen Focus Growth Strategy'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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