The Jensen Quality Growth Investment Team Sells Position in Intuit Inc (INTU)
May 2026
Company Overview
Founded in 1983 and headquartered in Mountain View, California, Intuit Inc (ticker: INTU) is a global financial-technology platform led by CEO Sasan Goodarzi. It serves roughly 100 million consumers and small businesses through four flagship products: TurboTax (consumer tax), QuickBooks (small- and mid-market accounting, payments, and payroll), Credit Karma (consumer credit), and Mailchimp (marketing). The business reports in two segments: Global Business Solutions, anchored by QuickBooks, and Consumer, which spans TurboTax, Credit Karma, and ProTax.
What Led Us to Sell
Our decision to exit Intuit Inc (ticker: INTU) from the Jensen Quality Growth Strategy reflects a meaningful decline in our confidence in two areas that are central to our process: the durability of the company’s competitive advantages and the stability of its earnings.
- Competitive Advantages: Intuit’s moat has historically rested on deep customer entrenchment in TurboTax and QuickBooks, high switching costs, proprietary financial data, brand strength, and pricing power. Our concern is that the heart of that moat, guiding non-expert users through tax preparation and bookkeeping, is precisely the activity most exposed to generative and agentic AI, as models will be able to explain tax rules, classify transactions, and complete filings on demand. The latest quarter showed the first clear evidence of erosion: management acknowledged that it “lost on price” with the most price-sensitive do-it-yourself filers and now plans to adjust its lineup and pricing for them. On the small-business side, Global Business Solutions decelerated to 15% growth from 19% a year earlier, with QuickBooks accounting leaning increasingly on price, and even the one genuine accelerant, mid-market, is moving up into the territory of larger incumbents with deeper functionality.
- Earnings Stability: We believe the issue is not Intuit’s present-day financial strength, but the predictability of its future earnings, as the third quarter widened the range of plausible outcomes. Growth slowed across the higher-margin Consumer segment, with TurboTax up 7%, Credit Karma decelerating to 15% from 31%, and ProTax flat. The headline understates the pressure, because TurboTax Live now accounts for 53% of TurboTax revenue; backing it out implies the do-it-yourself remainder, the part most exposed to price and AI substitution, is declining at a low-teens rate. The company cut its full-year TurboTax outlook even while raising total-company guidance, and that raise leaned on cost reductions, a lower share count, and buybacks rather than demand. Margins fell as AI spending rose, with non-GAAP operating margin down 132 basis points and research and development up 19%. Tellingly, the company is leaning on a 17% workforce cut to protect margins. Together, these signal structural pressure on a historically high-margin franchise, widening the distribution of long-term outcomes beyond what we can underwrite.
Why Now
We had already reduced the position over time as our concerns built; the company’s third-quarter earnings report in May 2026 moved us to exit completely. The most telling signal was less the modest beat than the market’s response, a 20% decline that, in our view, repriced the durability of the franchise rather than the quarter itself. We are also wary that Intuit’s partnerships with leading AI providers, presented as broadening the top of the funnel, risk making the model the front door and Intuit the back-end execution layer, accelerating the disintermediation they are meant to defend against.
Strategy holdings are subject to change and should not be considered recommendations to buy or sell any security. Please click here for a listing of the Quality Growth Strategy’s current holdings.
The company discussion is solely intended to illustrate the application of our investment approach and is not to be considered a recommendation by Jensen. The specific security identified is taken from a representative accounts of the Jensen Quality Growth Strategy and does not represent all of the securities purchased and sold for the Strategy. Our views expressed herein are subject to change and should not be construed as a recommendation or offer to buy or sell any security and are not designed or intended as a basis or determination for making any investment decision for any security. Our discussions should not be construed as an indication that an investment in a security has been or will be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of any security discussed herein.
Certain information contained in this material represents or is based upon forward-looking statements, which can be identified by the use of terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of a client account may differ materially from those reflected or contemplated in such forward-looking statements.
This information is current as of the date of this material and is subject to change at any time, based on market and other conditions.
Jensen Investment Management, Inc., is an investment adviser registered under the Investment Advisers Act of 1940. Registration with the SEC does not imply any level of skill or training. Although taken from reliable sources, Jensen cannot guarantee the accuracy of the information received from third parties.
© 2026 Jensen Investment Management
Related Insights
Jensen News & Insights
The Jensen Investment Team added IDEXX Laboratories (IDXX) to the Quality Growth Strategy, citing strong fundamentals, recurring revenue and high customer retention.
The Jensen Investment Team added Cintas (CTAS) to the Quality Growth Strategy due to its strong fundamentals, competitive advantages, and attractive valuation.
The Jensen Investment Team reestablished a position in Amphenol (APH) for the Quality Growth Strategy following an improved growth outlook.
The AI-driven stock selloff is creating gaps between price and value. Jensen identifies companies that may have durable moats and long-term upside.
The Jensen Investment Team sold portfolio holding ADP from the Quality Growth Strategy as the outlook for growth and returns became less compelling.
AI beneficiaries now dominate the S&P 500, with the top 10 stocks exceeding 40% of index weight. Jensen explores the market context, parallels to prior concentration periods and how quality firms adapt.