Eagle Capital Management, an investment management company, released its first quarter 2026 investor letter. A copy of the letter is available to download here. The letter notes that individual stocks and subsectors are now more reactive to sentiments, reducing market efficiency but creating opportunities to add value. Over the last decade, multi-asset managers, or pods, have grown significantly, operating with leverage, tight risk controls, and quickly cutting losers, often relying on earnings momentum. Growth managers have outperformed value managers, attracting flows; retail investors increasingly chase momentum, reducing overall diversity and amplifying momentum’s influence. It’s more valuable to find controversial or underexplored assets early and benefit as earnings grow. Eagle has capitalized on this trend, expecting continued opportunities. Investments should consider probabilities, building portfolios for various outcomes rather than betting on one, which allows for compound growth. The Strategy is generating strong long-term absolute returns. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, Eagle Capital Management highlighted stocks like Workday, Inc. (NASDAQ:WDAY). Workday, Inc. (NASDAQ:WDAY) is a leading enterprise software company that provides cloud applications for human resources and financial management. On May 20, 2026, Workday, Inc. (NASDAQ:WDAY) closed at $126.61 per share. One-month return of Workday, Inc. (NASDAQ:WDAY) was 5.35%, and its shares lost 55.60% over the past 52 weeks. Workday, Inc. (NASDAQ:WDAY) has a market capitalization of $30.47 billion.
Eagle Capital Management stated the following regarding WORKDAY, INC. (NASDAQ:WDAY) in its Q1 2026 investor letter:
“SAP, WORKDAY, INC. (NASDAQ:WDAY), and Intuit are highly entrenched application software businesses. Workday is the only de novo ERP to be successfully built in decades, with the leading global human capital management position and a large financials platform. Software is lately controversial due to AI-driven disruption. AI is deflationary for engineering costs and will change many workflows in how software is used. The technology is widening the distribution of 5- to 10-year outcomes for these businesses. In some cases, the central tendency shifts lower; in others, it’s stable or even shifts upward. The entire space has sold off over the past year, and we believe the recovery will be more heterogeneous than the decline. Many businesses will be impaired, but a number will likely benefit.
We have positioned ourselves with companies that we expect to be comparatively resilient, that also have idiosyncratic earnings growth paths or call options. Workday earns well bel ow normalized margins today and may reignite product development with the return of its founder to the CEO role.”
Workday, Inc. (NASDAQ:WDAY) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 70 hedge fund portfolios held Workday, Inc. (NASDAQ:WDAY) at the end of the fourth quarter, up from 64 in the previous quarter. In fourth quarter of fiscal 2026, Workday, Inc. (NASDAQ:WDAY) reported revenue of $2.532 billion, marketing an increase of 15% year-over-year. While we acknowledge the risk and potential of WORKDAY, INC. (NASDAQ:WDAY) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WORKDAY, INC. (NASDAQ:WDAY) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Workday, Inc. (NASDAQ:WDAY) and shared the list of AI stocks that are about to explode. Workday, Inc. (NASDAQ:WDAY) detracted from Hotchkis & Wiley Mid-Cap Value Fund due to AI disruption concerns. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
