Strong Execution Lifted Automatic Data Processing (ADP) in Q3 Soumya Eswaran Mon, October 12, 2026 at 8:49 AM EDT 3 min read ^GSPC +0.59% ADP +0.06% MSTR +1.89% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
ClearBridge Investments, a global equity manager, recently published third-quarter 2026 commentary for its "Dividend Strategy". The letter can be downloaded here. AI continued to dominate the market, but rising interest rates, narrow leadership, and intensifying competition increased underlying risks. The Strategy reported modest gains in the quarter but underperformed the S&P 500 due to mixed stock selection and stock-specific headwinds. While maintaining exposure to AI leaders, the focus is also on valued, durable businesses in other sectors. The S&P 500 rose 2.3% in the third quarter, as the ClearBridge Dividend Strategy initially outperformed but lost ground in September. The IT sector was the main contributor to the S&P 500's quarterly performance, yet increasing turbulence was noted beneath the surface. Also, check the strategy's top five holdings to see its best picks in 2026.
In its Q3 2026 investor letter, ClearBridge Dividend Strategy highlighted Automatic Data Processing, Inc. (NASDAQ:ADP) as a top contributor for the quarter. Automatic Data Processing, Inc. (NASDAQ:ADP) is a leading cloud-based human resource management software and administrative services provider. On October 09, 2026, Automatic Data Processing, Inc. (NASDAQ:ADP) closed at $270.88, with a $107.34 billion market capitalization. Automatic Data Processing, Inc. (NASDAQ:ADP) posted a 5.31% YTD gain, trading within a 52-week range of $188.16 to $288.00.
ClearBridge Dividend Strategy stated the following regarding Automatic Data Processing, Inc. (NASDAQ:ADP) in its Q3 2026 investor letter:
"Automatic Data Processing, Inc. (NASDAQ:ADP), meanwhile, continued to execute well and was a top contributor: earlier in the year we bought the dip in ADP as we believed fears of AI disintermediation were overblown. The shares advanced in the third quarter on solid revenue and adjusted earnings growth, supported by strong client retention, pricing and new business bookings. Margin expansion and a supportive fiscal 2027 outlook reinforced confidence in continued earnings growth."
Automatic Data Processing, Inc. (NASDAQ:ADP) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held Automatic Data Processing, Inc. (NASDAQ:ADP) at the end of the second quarter, which was 67 in the previous quarter. While we acknowledge the potential of Automatic Data Processing, Inc. (NASDAQ:ADP) 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 Automatic Data Processing, Inc. (NASDAQ:ADP) and shared Andrew Hill Investment Advisors' views on the company. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
This article is originally published at Insider Monkey.
