Parnassus Core Equity fund dumped Salesforce and rotated into GE Vernova, NuScale, and Bloom Energy for AI-driven power demand.
Parnassus Investments' Core Equity Fund returned 16.83% in the second quarter of 2026, outperforming the S&P 500's 15.20% gain. The outperformance was driven by holdings in information technology and communication services, while the fund's lack of energy exposure provided a tailwind. Financials and health care detracted from results.
The fund made significant portfolio adjustments during the quarter, exiting its entire Salesforce position and establishing a new stake in GE Vernova as it shifts capital toward companies with more direct exposure to artificial intelligence infrastructure.
The decision to sell Salesforce reflects a reassessment of the horizontal application software sector. According to the fund's second-quarter investor letter, conviction in the sector declined "amid increased competition, weaker pricing dynamics and less attractive valuations." Salesforce closed at $193.32 on August 13, 2026, with a market capitalization of approximately $164.92 billion. While the stock gained 17.92% over the prior month, hedge fund ownership slipped to 101 portfolios at the end of the first quarter, down from 115 in the previous quarter.
The proceeds from the Salesforce sale were redeployed "into opportunities with more direct exposure to structural AI tailwinds," with GE Vernova serving as the primary recipient. The energy technology company, which provides power generation, electrification, and grid solutions, had "previously sold off significantly and reached a valuation that we found compelling." The fund cited "increasing confidence about the durability of AI supply chain power needs" as the primary driver of the new position. GE Vernova closed at $1,039.90 on August 13, with a market capitalization of approximately $279.50 billion, having traded between $530.16 and $1,195.94 over the past 52 weeks. Hedge fund interest in the company ticked up modestly, with 118 portfolios holding GE Vernova at quarter-end versus 115 in the prior period.
Waste Management remains a fund holding despite mixed first-quarter results. While the environmental solutions provider topped earnings estimates, it missed revenue expectations, and the defensive stock "did not fully participate in the broader market rally." The fund expressed confidence in Waste Management's long-term growth potential, citing "its strong competitive moat and dominant market position in landfill ownership." Waste Management shares closed at $226.32 on August 13, with a market capitalization of approximately $89.62 billion, though hedge fund ownership declined to 61 portfolios from 65.
The fund's broader strategy emphasizes artificial intelligence infrastructure, semiconductors, electrification, and industrial automation while maintaining defensive exposure to quality compounders. Looking ahead, the manager remains "constructively bullish on U.S. equities" but flagged concerns about narrow market leadership, trade tensions, inflation, and geopolitical risks. The fund intends to continue favoring "high-quality, competitively advantaged businesses at attractive valuations" with a balanced approach to capturing AI-driven opportunities while limiting downside risk.