Market Overview - The stock market experienced high volatility in Q2 2025, with a 7% drop in stock prices from April 2 to April 7 due to an unexpected tariff announcement [1] - Following the Trump Administration's retreat from extreme tariff proposals, the market saw a dramatic recovery [1] - Positive corporate earnings and solid economic data indicate potential economic growth ahead [1] Renaissance Investment Management Insights - The Renaissance Investment Small Cap Growth Strategy outperformed the Russell 2000 Growth Index in Q2 2025 [1] - The fund's investor letter highlighted Grid Dynamics Holdings, Inc. (NASDAQ:GDYN) as a key stock, which reported a one-month return of -5.28% and a 52-week loss of 44.63% [2] Grid Dynamics Holdings, Inc. Analysis - Grid Dynamics Holdings, Inc. reported revenue of $101.1 million in Q2 2025, marking a 21.7% increase compared to Q2 2024 [4] - The company acknowledged a more uncertain macroeconomic outlook while maintaining its full-year revenue guidance [3] - Increased investments in AI are expected to pressure margins in the short term, but the company is well-positioned for digital transformation and AI adoption [3] Hedge Fund Interest - Grid Dynamics Holdings, Inc. was held by 12 hedge fund portfolios at the end of Q2 2025, a decrease from 20 in the previous quarter [4]

Core Viewpoint - The article emphasizes the resilience of Philip Morris International, S&P Global, and Walmart as investment options amidst market volatility and tariff concerns, suggesting that investors should focus on dividend growth stocks that are insulated from economic downturns [1][2]. Philip Morris International - Philip Morris International (PMI) was spun off from Altria in 2008, allowing it to focus on its overseas business while Altria dealt with domestic challenges [3]. - From 2008 to 2024, PMI's adjusted earnings per share (EPS) grew at a compound annual rate of 4.4%, driven by price increases and cost-cutting measures, alongside a shift towards smoke-free products [4]. - PMI has consistently raised its dividend since the split, currently offering a forward yield of 3.6% with a trailing payout ratio of 88%, indicating potential for future increases [5]. - Analysts project adjusted EPS growth of 9% in 2025 and 10% in 2026, with a reasonable valuation at 21 times forward earnings [5]. S&P Global - S&P Global provides essential financial data and analytics services to approximately 80% of Fortune 500 companies, utilizing AI-driven tools to enhance its offerings [6]. - The company is insulated from tariffs as it offers services rather than physical goods, making its services more valuable in turbulent markets [7]. - Despite a temporary slowdown in its credit ratings business due to high interest rates, S&P Global is expected to recover as rates decline [7]. - The company has a forward yield of 0.9% and has raised its dividend for 52 consecutive years, with a low trailing payout ratio of 29% [8]. - Analysts anticipate EPS growth of 9% in 2025 and 12% in 2026, with a forward price-to-earnings ratio of 26, indicating it is not overly expensive [8]. Walmart - Walmart serves 270 million customers weekly across 10,750 stores and online marketplaces in 19 countries, providing it with significant scale to mitigate tariff impacts [9]. - Many of Walmart's suppliers pre-shipped products to the U.S. before tariffs were implemented, and the company can negotiate lower prices or adjust retail prices to manage costs [10]. - Walmart has a forward yield of 1.1% and has raised its dividend for 52 consecutive years, maintaining a low payout ratio of 34% [11]. - Analysts expect adjusted EPS growth of 5% in fiscal 2026 and 12% in fiscal 2027, with a forward price-to-earnings ratio of 31, suggesting that its core strengths may justify the higher valuation [11].