First Pacific Advisors Highlights TD SYNNEX in Second-Quarter Letter Amid Data Center Growth
AI-generated from multiple sources. Verify before acting on this reporting.
NEW YORK — First Pacific Advisors disclosed on Monday that TD SYNNEX Inc. remains a top holding in its FPA Queens Road Small Cap Value Fund, citing the technology distributor's robust earnings and expanding data center operations as key drivers for the position.
The disclosure came in the firm's second-quarter 2026 investor letter, released September 1. The letter details the fund's strategy and performance for the period ending June 30, 2026. First Pacific Advisors identified TD SYNNEX, which trades on the New York Stock Exchange under the ticker SNX, as a primary contributor to the portfolio's value during the quarter.
The investment manager pointed to TD SYNNEX's strong financial results and its strategic pivot toward high-growth sectors within the technology infrastructure space. Specifically, the letter highlighted the company's accelerating growth in its data center business. As enterprises and cloud service providers continue to expand their computing capabilities, TD SYNNEX has positioned itself as a critical intermediary for hardware and software distribution, capturing increased market share in this segment.
TD SYNNEX, formerly known as Synnex before its rebranding following the acquisition of Tech Data's U.S. business, has undergone significant restructuring over the last few years to streamline operations and focus on high-margin solutions. The company's recent earnings reports have reflected these efforts, with revenue growth outpacing broader industry averages in specific infrastructure categories. First Pacific Advisors noted that this operational efficiency, combined with the macroeconomic demand for data center expansion, supports a positive long-term outlook for the stock.
The FPA Queens Road Small Cap Value Fund focuses on investing in smaller-cap companies trading at attractive valuations relative to their fundamentals. By maintaining a significant stake in TD SYNNEX, First Pacific Advisors signals confidence in the company's ability to navigate supply chain complexities and capitalize on the ongoing digital transformation of global businesses.
While the investor letter emphasizes the strength of the data center segment, the broader technology distribution market faces headwinds from fluctuating component costs and shifting consumer demand for end-user electronics. TD SYNNEX has historically balanced these risks by diversifying its client base across enterprise, commercial, and government sectors. The firm's ability to maintain margin stability in a volatile pricing environment remains a focal point for investors monitoring the stock.
As of Monday's market close, TD SYNNEX shares were trading in line with broader sector movements. First Pacific Advisors did not disclose the exact percentage of the fund allocated to the holding, though it was listed among the top positions. The firm will provide further updates on portfolio adjustments and performance metrics in its upcoming third-quarter communication.
Investors are now watching to see if TD SYNNEX can sustain its data center momentum through the remainder of 2026 as global interest rates and technology spending patterns evolve. The company's next earnings report is expected to offer more clarity on whether current growth trajectories will hold against emerging competitive pressures in the distribution channel.